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Thought Starters

Thought Starters: post carbon futures, social class and Brazil

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 venture capital, Uber’s valuation, mobile commerce, innovations in the telecom and the energy sector, social class and Brazil among other things.

Benedict Evans has written a valuable overview of the venture capital sector, pointing to the importance of winning big rather than winning often, with failure a necessary part of the equation for investors if they really want to get ahead:

There are no 10x deals

Uber has been one of the darlings of the startup sector with its position further strengthened by the sale of its Chinese subsidiary which was proving a drain on its finances. Steve LeVine has looked to pour some cold water on Uber’s current valuation suggesting that the brand is not necessarily the sure thing that some investors would have you believe:

With Uber, you have a singular brand with a credible story. The question is whether that brand and that credibility, plus the other assets on Uber’s balance sheet, add up to $62.5 billion. Here is a business under siege by rivals big and Lilliputian, in the midst of a cannibalistic pricing race to the bottom, bleeding cash and losing money while battling well-heeled, technologically savvy incumbents displaying every intention of owning the space themselves.

Ofcom released its annual Communications Market report, providing a whole host of benchmark statistics for the UK across television, online video, radio, telecoms and the internet. Well worth bookmarking:

Household take-up of digital communications/ AV devices: 2006-2016

Mobile commerce is definitely on the rise as we spend more and more time glued to our smartphone screens. What’s interesting is that for all the talk of the opportunities of mobile apps, browser based purchasing dominates with a lead that’s growing according to Andy Favell:

Access Method for Mobile Shoppers

Federic Filloux looks at how the traditional media players have been sidelined by the news aggregators (primarily Facebook and Google) and newer media outlets more attuned to the rapid fire news cycles of the current age:

For the news industry, this huge economic gap carries two likely consequences: internet giants and digital native news outlets will have tremendous financial firepower to do whatever it takes in terms of marketing or their ability to go further into the general information segment (cf. Snapchat); and the network effect will apply even further when advertising dollars keep drying up for what will be increasingly seen as niche media.

More broadly, except for the old, educated and affluent segment of the population, the vast majority will be informed by a rapid-fire of superficial and shallow contents spat by the social firehose. Expect more Brexit hurricanes and Trump floods in the future.

Self driving cars are reshape our relationship with the automobile but it’s not just the driver who will be impacted by these changes as Robin Chase explores:

We’re at a fork on that roadmap. One direction leads to a productive new century where cities are more sustainable, livable, equitable, and just.

But if we take the wrong turn, we’re at a dead end. Cities are already complex and chaotic places in which to live and work. If we allow the introduction of automated vehicles to be guided by existing regulations we’ll end up with more congestion, millions of unemployed drivers, and a huge deficit in how we fund our transportation infrastructure. We will also miss an opportunity to fix transportation’s hereto intractable reliance on liquid fossil fuels (and their associated pollution).

There’s no disputing the fact that mobile is reshaping the world we live in with data via hardwired, mobile and wifi networks fueling the growth in an ever expanding range of devices (smartphones, sports trackers etc) and services (mobile messaging Shazam etc). Our current infrastructure isn’t really built for these growing demandsJeff Hecht looks at what providers are doing to future proof our telecoms infrastructure:

Bottleneck Engineering

The energy sector is facing growing calls to switch away from fossil fuel based energy given the growing threat from climate change. Renewable energy has traditionally been handicapped by intermittent supply and the costs of energy storage whilst nuclear is costly and has a rather mixed safety record. Tim Harford points to the potentially valuable role of price signals in getting the energy market to travel in the right direction:

Overall, there is little prospect of running out of fossil fuels, and it seems unlikely that alternative energy sources will outcompete them. And yet we must make the shift, or risk catastrophic climate change. Our reserves of fossil fuels may be no constraint but the atmosphere’s capacity to safely absorb carbon dioxide is.

There is some space for optimism. Renewable energy sources are no longer impossibly costly. Nor is nuclear power, even though the costs have moved in the wrong direction. We cannot wait for the market to make the switch unaided — but the gap is no longer so wide that sensible policy cannot bridge it. The centrepiece of such a policy would be to raise the price of carbon dioxide emissions, using internationally co-ordinated taxes or their equivalent. Such a tax would make renewable energy sources more attractive — as well as encouraging energy efficient technologies and behaviour. Market forces can do the rest. Low carbon energy is not free — but it is worth paying for.

Ambrose Evans-Pritchard points to innovations in energy storage as giving more than a helping hand,  changing what is economically viable and potentially making Hinkley Point look like something of a white elephant:

This transforms the calculus of energy policy. The question for the British government as it designs a strategy fit for the 21st Century – and wrestles with an exorbitant commitment to Hinkley Point – is no longer whether this form of back-up power will ever be commercially viable, but whether the inflection point arrives in the early-2020s or in the late 2020s.

Simon Hattenstone  has taken a critical at meritocracy in the UK in light of Theresa May’s recent cabinet appointments which are less dominated by Etonians than her predecessor David Cameron. This raises the question will we see real change or more of the same?

Lee Elliot Major of the Sutton Trust, talks of an academic arms race. “Every time opportunities widen for those from less privileged backgrounds, the middle classes find some way of defining merit to their advantage again. Never underestimate the skills and the tenacity of the middle classes to reinforce their privileged position in society. So there was a university expansion, but if you look at the more prestigious universities, there’s still a stark gap in terms of those from more advantaged backgrounds versus those from disadvantaged backgrounds. And increasingly you’re seeing post-graduate degrees.”

The rise of Donald Trump has prompted much soul searching among political commentators in the US pointing to it as a symptom of the growing social inequality. Research from Gallup provides a more nuanced analysis as Max Ehrenfreund and Jeff Guo report:

According to this new analysis, those who view Trump favorably have not been disproportionately affected by foreign trade or immigration, compared with people with unfavorable views of the Republican presidential nominee. The results suggest that his supporters, on average, do not have lower incomes than other Americans, nor are they more likely to be unemployed.

Yet while Trump’s supporters might be comparatively well off themselves, they come from places where their neighbors endure other forms of hardship. In their communities, white residents are dying younger, and it is harder for young people who grow up poor to get ahead.

Alec MacGillis looks more broadly at the growth of a white underclass in the US which has  provided a fertile ground for Trump’s more xenophobic view of the world:

So why are white Americans in downwardly mobile areas feeling a despair that appears to be driving stark increases in substance abuse and suicide? In my own reporting in Vance’s home ground of southwestern Ohio and ancestral territory of eastern Kentucky, I have encountered racial anxiety and antagonism, for sure. But far more striking is the general aura of decline that hangs over towns in which medical-supply stores and pawn shops dominate decrepit main streets, and Victorians stand crumbling, unoccupied. Talk with those still sticking it out, the body-shop worker and the dollar-store clerk and the unemployed miner, and the fatalism is clear: Things were much better in an earlier time, and no future awaits in places that have been left behind by polished people in gleaming cities. The most painful comparison is not with supposedly ascendant minorities—it’s with the fortunes of one’s own parents or, by now, grandparents. The demoralizing effect of decay enveloping the place you live cannot be underestimated. And the bitterness—the “primal scorn”—that Donald Trump has tapped into among white Americans in struggling areas is aimed not just at those of foreign extraction. It is directed toward fellow countrymen who have become foreigners of a different sort, looking down on the natives, if they bother to look at all.

Reflecting the current race between Hillary Clinton and Donald Trump, The Economist suggests that politics will increasingly be about open versus closed models rather than the traditional battles between left and right:

Left, right, left, right

The Rio Olympics has put Brazil in the spotlight during a tumultuous period in its political history. Franklin Foer has a valuable piece that provides a valuable background to recent events:

But the public’s understandable despair isn’t wholly shared by the experts I spoke with. Stepping back, they saw unlikely causes for hope. Impeachment revealed the worst about Brazilian democracy—and the worst wasn’t so terrible. There’s no talk of returning to dictatorship, no real fear of a Hugo Chávez–like figure clouding the sky. Impeachment was a poor showing of democracy, but it was still democracy. Even with all the budgetary turmoil, Bolsa Família remains firmly ensconced. Austerity will whack the poor, yet Lula’s evolution of Brazilian social democracy won’t reverse course. Most important, the Petrobras scandal is so spectacular that its grasp on the popular imagination doesn’t seem to be slipping. Indeed, Temer’s impeachment gambit has yet to slow the Moro investigation. Brazil has a once-in-a-generation chance to untether its politics from its debilitating state of codependence with the big firms. Hosting the Olympics was never going to bring Brazil the national greatness Lula advertised. Freeing its democracy and economy from the plague of corruption could.

Saudi Arabia feels for many of us like a different world given the way that religion shapes everyone’s lives. Studio D’s research into the lives of young Saudi’s provides a valuable window of how people adjust and if that whets your appetite, it’s also worth reading Jessi Hempel’s coverage of the research process:
For Saudi female youth the smartphone is the great liberator
The featured image is a Gue mural photographed by Angelo Jaroszuk Bogasz at the Altrove Street Art Festival in Catanzaro, Italy and published in StreetArtNews.
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Thought Starters

Thought Starters: mobile’s evolution, the gang of four, sadness on Tumblr and Brexit

Thought Starters provides me with a chance to look through the articles, research and opinion pieces I’ve read, highlighting the more interesting trends, developments and changes in the world you and I live in. This edition looks at the evolution of mobile, Amazon, Apple, Google and Facebook’s stranglehold on media and technology, Tumblr’s role among teens and the upcoming Brexit referendum among other things. Happy reading. 

With the Mobile World Congress on in Barcelona, Benedict Evans looks back at how we’ve got to today’s mobile ecosystem and how various incumbents were wrongfooted by these changes:

It’s always fun to laugh at the people who said the future would never happen. But it’s more useful to look at the people who got it almost right, but not quite enough. That’s what happened in mobile. As we look now at new emerging industries, such as VR and AR or autonomous cars, we can see many of the same issues. The big picture 20 years out is actually the easy part, but the details are the difference between Nokia and DoCoMo ruling the world and the world as it actually happened. There’s going to be a bunch of stuff that’ll happen by 2025 that we’d find just as weird.

The recent launches of Facebook’s Instant Articles and Google’s Accelerated Mobile Pages aim to get content to consumers faster on their mobile phone (as well as keeping content within their respective domains). The following graph should give you an idea of why load times are so important for consumers:

Cognitive load associated with stressful situations

Bruce Schneier gives a valuable defence of Apple’s refusal to handover the ‘keys’ to the San Bernardino shooter’s iPhone. I am not so sure if it’s quite as cut and dry as Schneier makes out but there’s a strong case for not opening back doors given that there are plenty of people whose governments are less benevolent than are own:

What the FBI wants to do would make us less secure, even though it’s in the name of keeping us safe from harm. Powerful governments, democratic and totalitarian alike, want access to user data for both law enforcement and social control. We cannot build a backdoor that only works for a particular type of government, or only in the presence of a particular court order.

NYU Stern Professor Scott Galloway provides a rapid fire look at the growing stranglehold that Amazon, Apple, Facebook and Google have on the media and technology sector – entertaining and informative:

A valuable companion to Galloway’s video is The Guardian’s presentation on key trends in the media sector focusing on where consumers are spending their time, emerging media models and podcasting among other things:

Whilst Tumblr might not be living up to Yahoo’s expectations with its monetisation, theres’ no denying its cultural impact. Elspeth Reeve provides a window into where Tumblr fits into teens’ digital lives:

Wong explained that teens perform joy on Instagram but confess sadness on Tumblr. The site, he said, is a “safe haven from their local friends. … On Tumblr they tell their most personal stories. They share things that they normally wouldn’t share with their local friends because of the fear of judgment. That has held true for every person that I’ve met.”

The IAB UK is pushing the importance of online advertising in the living room, pointing out that television isn’t the only game in town if you want consumers’ attention:

“Second screening is ingrained to such a degree that all screens are now equal, there’s no hierarchy, only fragmentation of attention – actually switch-screening is a much more accurate term,” says Tim Elkington, the IAB’s Chief Strategy Officer. “Furthermore, entertainment is only a small part of the living room media activity. It’s now a multifunctional space where people jump between individual and group activities, be it shopping, social media, emails, work or messaging.”

Ben Carlson explores why bear markets are so painful for consumers and businesses (and it’s not just the hole it leaves in their pockets):

One of the reasons for this is because of the difference between the nature of bull and bear markets. There’s an old saying that stocks take the escalator up but the elevator down. Bull markets are fairly slow and methodical. Bear markets are violent and come in waves. Bull markets take time to climb the wall of worry while bear markets can wipe out a decent amount of those gains in a hurry.

Thomas Piketty’s Capital in the Twenty-First Century has provoked renewed interest in the issue of income inequality. Dr Max Roser’s analysis points to rising inequality in English speaking countries which contrasts with the other developed economies profiled:

Share of Total Income going to the Top 1%

Britain is now in Brexit fever as debates  rage over whether the country should leave the European Union following the announcement by Prime Minister David Cameron of a referendum in July. The Economist has done a quick roundup of some of the arguments those for and against Brexit are pushing:

Arguments for and against Brexit, according to the main campaigns

One of the big uncertainties is the impact that Brexit will have on the UK’s economy. Chris Giles looks at three possible scenarios, a Booming Britain, a Troubled Transition and a Disastrous Decision.

The Economist point to the importance of education as key arbiter in determining Briton’s perceptions of Brexit. Tertiary education in particular providing a different filter to view these changes as well as increasing the potential benefits from being part of the European Union:

In the long term, this bodes well for pro-Europeans. University attendance has exploded, which suggests that Britain will become more internationalist and comfortable with EU co-operation. Yet in the meantime it seems the country will be increasingly polarised: liberal, Cambridge-like places on the one side; nationalist, Peterborough-like ones on the other and an ever-shrinking middle ground between the two, as the population bifurcates into those whose skills make them globally competitive and those who must compete with robots and the mass workforces of the emerging economies. Democracy—especially in a system as centralised and majoritarian as that of Britain—assumes some common premises and experiences, a foundation that thanks to the great educational-cultural divide is now at risk. Eventually Britain will look more like Cambridge than it does today. But until then decades of division and mutual alienation await.

Another country that is having a rather mixed relationship with the European Union is Poland. Christian Davies follows Jarosław Kaczyński and the Law & Justice party’s rise to power and concerns about growing nationalism and authoritarianism:

Commonly labelled conservative or nationalist, Law and Justice blends the religious and patriotic rituals of Poland’s long history of resistance to foreign oppression with hostility to free-market capitalism and a heavy dose of conspiracy regarding the machinations of Poland’s enemies. It is the vanguard of a movement that goes far beyond the party itself, supported by sympathetic smaller parties, ultra-Catholic media, nationalist youth organisations and an assortment of cranks and cynics who share a hostility to liberalism in all its guises. As foreign minister Witold Waszczykowski told the German tabloid Bild, his government “only wants to cure our country of a few illnesses”, such as: “a new mixture of cultures and races, a world made up of cyclists and vegetarians, who only use renewable energy and who battle all signs of religion … What moves most Poles [is] tradition, historical awareness, love of country, faith in God and normal family life between a woman and a man.”

Valentine’s Day this year was awash with media coverage of online dating and the impact it is having on relationships. It’s interesting to look back on how people have met their other halves in the past. These figures might not be right up to date (certainly pre Tinder) but they do give a valuable indicator of changing social trends:

How heterosexual US couples met their romantic partners 1940-2009

The featured image is a Hitotzuki mural from the POW! WOW! festival in Hawaii and published in Arrested Motion.

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Thought Starters

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.