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: the move to mobile, Oculus Rift, post Arab Spring and experiments with universal basic income

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. This edition includes a look at the growing importance of mobile, questions about Oculus Rift, coverage of Middle East post Arab Spring, Finland’s experiment with the universal basic income and much more.

The International Telecommunications Union’s Measuring the Information Society Report provides a valuable collection of telecom statistics with an accompanying webpage enabling users to quick compare different countries and regions. What becomes quickly apparent in some of the statistics is how less developed countries have skipped of fixed telecoms as they make the transition directly to a mobile world:

ICT access by development status

Whilst the move to mobile is particularly apparent in many developing countries, figures from Enders Analysis point to UK’s own transition to mobile in internet use, ecommerce and online advertising:

Monetisation of mobile devices

Taking this further, Benedict Evans puts forward 16 hypotheses on how mobile has reshaped the technology landscape. Well worth spending time with this and the his accompanying articles.

Neural nets are one of the areas where we’re seeing significant advances in artificial intelligence.  Steven Levy has an entertaining profile of the work Alexander Mordvintsev and his attempts to understand how these neural nets work which has led to computationally produced images that are probably best described as psychedelic:

Inside Deep Dreams: How Google Made Its Computers Go Crazy

Oculus Rift has become the poster boy for the virtual reality community but Jason Pfaff suggests the need for expensive goggles tethered to a powerful Windows PC and poor user experience could see it quickly disrupted:

Which brings me to Oculus, and their flagship product, the Rift.  Today, as anyone with an Oculus development kit (DK2) will tell you, the experience provided by the hardware is like nothing you’ve ever experienced.  It is pure, blissful magic.  But, and this is key, to get to that experience you have to do a few things you haven’t done in a long time.  For starters, you need to buy a premium and Windows based PC.  Then, you have to find a massive file on an online store and wait minutes for it to download and eat large swaths of your memory.  Then you go into Windows Explorer, paste it from your download folder to the folder Oculus will read from, and then you extract the files.  Think about that.  Then you crack open that folder to find the one that launches it, then you click, then you wait, and then you hope.  And if it doesn’t work, you try another folder or another file, or look for another file called “Direct to Rift mode” to see if that forces the app through to the display.  This is repeated for every app, piece of content or game you want to display on your Rift. A lot of friction.

The media sector continues to evolve as consumers move their content consumption online and content producers find their access to consumers increasingly dictated by social media. The Nieman Foundation has asked a long list of opinion makers what they think are the important issues and trends for journalism in 2016.

Consumers are moving to non linear television with the use of PVRs (eg Sky+HD box), catch up television services (eg BBC iPlayer) and subscriptions to streaming video services (eg Netflix). James Poniewozik looks at what this means for the makers and consumers of television programmes:

HBO series like “Deadwood” — which jettisoned the ad breaks and content restrictions of network TV — have been compared to Dickens’s serial novels. Watching a streaming series is even more like reading a book — you receive it as a seamless whole, you set your own schedule — but it’s also like video gaming. Binge-watching is immersive. It’s user-directed. It creates a dynamic that I call “The Suck”: that narcotic, tidal feeling of getting drawn into a show and letting it wash over you for hours. “Play next episode” is the default, and it’s so easy. It can be competitive, even. Your friends are posting their progress, hour by hour, on social media. (“OMG #JessicaJones episode 10!! Woke up at 3 a.m. to watch!”) Each episode becomes a level to unlock.

With those new mechanics comes a new relationship with the audience. Traditional television — what the jargonmeisters now call “linear TV” — assumes that your time is scarce and it has you for a few precious hours before bed. The streaming services assume they own your free time, whenever it comes — travel, holidays, weekends — to fill with five- and 10-hour entertainments.

Tom Mitchell and Patti Waldmeir look at the massive growth in China’s  business elite and the growing tension with the ruling Communist Party which has seen the temporary disappearance of a number of business leaders:

The number of dollar billionaires in China

Adolf Hitler’s Mein Kampf is about to come out of copyright in Germany which has prompted The Economist to look at the shadow Nazi rule casts on contemporary German society:

If a country can ever be said to be good, Germany today can. And yet Germans know that whenever others are angry with them, they will paint a Hitler moustache on posters of their chancellor. Many Germans are fed up with this—with being “blackmailed”, as Bild, the leading tabloid, complained this spring, when Greece unexpectedly brought war reparations into negotiations about bail-outs in the euro crisis. Other Germans, mainly on the left, fret about a new “post-post-nationalism”, as Germany tentatively articulates its self-interest abroad. For most countries, this would count as normal. For Germany, it remains complicated.

Gilbert Achcar and Nada Matta look at the more recent legacy of the Arab Spring five years on from its beginnings in Tunisia, and they point to why some countries where more successful in their transitioning than others:

Five years into the uprisings, however, counterrevolutionary forces composed of the old regimes and Islamic fundamentalist forces have regained the political initiative, and are now violently vying for control. Egypt is under a worse dictatorship than before its uprising, and civil wars have broken out in Syria, Libya, and Yemen. Hundreds of thousands have died, and many millions have been displaced.

It’s also well worth reading Scott Atran’s detailed analysis of the rise of ISIS in which he draws parallels with earlier revolutionary movements and the conviction of its members which is in stark contrast to much of its opponents:

Civilisations rise and fall on the vitality of their cultural ideals, not their material assets alone. History shows that most societies have sacred values for which their people would passionately fight, risking serious loss and even death rather than compromise. Our research suggests this is so for many who join ISIS, and for many Kurds who oppose them on the frontlines. But, so far, we find no comparable willingness among the majority of youth that we sample in Western democracies. With the defeat of fascism and communism, have their lives defaulted to the quest for comfort and safety? Is this enough to ensure the survival, much less triumph, of values we have come to take for granted, on which we believe our world is based? More than the threat from violent jihadis, this might be the key existential issue for open societies today.

There’s been a lot of talk about a movement from corporate to self-employment. For those people whose skills are in demand, this can offer substantial benefits but for the less in demand, the transition to the freelance economy can pose significant challenges to individuals financial security. One of the solutions being suggested to this problem is the introduction of a universal basic income, guaranteeing all members of society an income regardless of their situation. Ben Schiller covers Finland’s experiment with the model, with the country seeing real potential benefits in terms of security, incentives to work and reduced bureaucracy:

The Finnish government likes the concept, and it’s putting serious resources behind a national experiment. Starting in 2017, up to 100,000 Finns could get up to 1,000 euros a month, in lieu of other benefits. These lucky souls won’t have to work. They won’t have to prove they’re in poverty to get the money. For two years, they’ll get a fixed amount to do with what they will.

The featured image is a mural produced by 108 for Bien Urbain in Besancon, France and found on ekosystem.

THOUGHT STARTERS: CONTENT THAT HAS GOT ME THINKING 12

Ben Thompson continues his series looking at the weakening position of the newspaper sector. He points to the fact that newspapers doesn’t necessarily have the best content or a wealth of customer weakening its ability to personalise its media and advertising offering . Thompson instead see a more atomised media sector with specialist providers and a smaller number of dedicated news organisations delivering the news we traditionally associate with newspapers.

Bloomberg looks at the Internet of Money as cryptocurrencies develop a growing range of use cases beyond simply acting as an alternative to fiat currency. For more of a background look at the pros and cons of  Bitcoin, try Freakonomics’ recent podcast

Andreessen Horowitz’s podcast series is proving a great source of insights into the technology and startup sector with recent episodes looking at full stack startups, mobile discovery and Bitcoin among others. Definitely worth following.

Twitter has an issue with onboarding, with users typically requiring a considerable investment in time before they get that ‘aha’ moment. Quartz looks at some of the obstacles Twitter faces in making the social network a more comfortable place for consumers.

Why people quit Twitter

Filmed in 2011 and still sounding fresh is Rory Sutherland’s TED talk looking at the importance of framing an issue or problem in engaging consumers.

Simon Kemp posts some thought starters for We Are Social looking at the evolving nature of marketing in an increasingly social and data driven age.

Felix Salmon looks at Facebook’s acquisition of Oculus Rift as the former’s move to become a tech conglomerate rather than an attempt to bring the world of virtual reality into social media.

GigaOm looks at the less friendly reception received by Oculus Rift’s Kickstarter supporters to the news that its being acquired by Facebook. As with many crowdfunding initiatives, supporters have no equity but strong identification with the funded projects.

Courtney Myers gives an overview of the London startup sector for General Assembly.

It’s men rather than women that are more likely to be living with their parents as young adults in the Western world according to figures from FiveThirtyEight.

datablog-chalabi-living-with-parents

Giving a rather amusing and scary view of the male species is Dissent’s reporting on the pick up artist community’s response to Ukraine’s attempts to align itself with Europe.

Going rather against my own preconceptions about the Australian male is this campaign from Snickers in Australia

The featured image is ELLIPSE by GoddoG in Arles, France.

 

What does 2014 hold? Questions I’m looking to see answered this coming year

There’s been lots of talk about trends and technologies that are likely to affect us in the coming years. The following are some of the questions I’m interested to have answered come this time next year.

Mobile Ecosystem

Will we see Samsung fork its Android offering in 2014? Samsung is developing an increasingly comprehensive selection of alternative mobile apps and services but Google is doing everything it can to raise the price of those who go it alone with Android.

Will we see Xiaomi develop a tangible presence in Western Markets? The company has a strong selection of handsets at competitive prices with growing interest in the brand abroad. Whether this is enough to see it stand out among other players Android (Samsung, HTC, Sony Mobile, LG, Nexus, Huawei, ASUS etc) remains to be seen.

Will CyanogenMod’s open source model enables it to grow beyond its tech savvy Android user base? The mobile operating system recently received funding from Andreessen Horowitz, Benchmark, Redpoint Ventures and Tencent but also faced a setback with Google’s removal of the software installer from the Play Store. CyanogenMod will need to make it as easy and safe as possible for users as the majority of people will be content with the status quo.

What wearable computing forms will break out of the current niche of early adopters? Google Glass and the Samsung Galaxy Gear have received mixed reviews from various commentators but there is a huge opportunity here with a wide selection of potential uses — something that is likely to see a range of form factors rather than a Swiss army knife approach where one tool solves all problems.

Mobile Messaging

Will we see Kik, Line or KakaoTalk make a substantial inroads in Western Europe? WhatsApp has carved out a strong position but the mobile messaging sector is not a category where winner necessarily takes all.

WhatsApp has stated that they’re not looking to diversify beyond mobile messaging, but it will be interesting to see if this changes given the success of Kik, Line and KakaoTalk in developing alternative revenue streams?

Will Snapchat manage to capture the public imagination in a similar manner to the way it has for teens over the course of the next year?

Social Media

Will Facebook’s changes to the News Feed see the demise of virality mills (Upworthy, Buzzfeed et al)?

Will Foursquare’s adoption of push notifications see wider adoption of the location based social network? Manually checking in is a clunky solution and it will be interesting to see whether this change of tack will be enough to gain mass appeal.

Gaming

Will the Steam Machine and Oculus Rift manage to break the stranglehold of Playstation and Xbox have in the gaming console market? Question will be moot if Steam (and their hardware partners) and Oculus VR don’t meet their target of a 2014 consumer release.

Internet and Society

Does the UK public care enough about what they see online to raise a fuss about ISP’s adoption of porn filtering? There’s been plenty of evidence pointing to the systems questionable effectiveness but the general public doesn’t seem to be up in arms about it.

Instore

Will retail brands be willing to invest in the relatively untested Bluetooth 4.0 (iBeacon, Paypal Beacon etc) technologies or will it be a case of wait and see?

Will Apple’s adoption of iBeacon in iOS7 permanently stall the introduction of NFC indefinitely?

Digital Currencies

Will we see Bitcoin become adopted as a method of payment outside the black economy? The recent erratic shifts in value of the currency make it a risky proposition for retailers without the infrastructure to adjust to changing prices.