Thought Starters: electric cars, decline of European business and music as cultural signifier

Thought Starters provides me with a chance to review and highlight some of the more important or interesting research and opinions that I’ve read over the last week or so. This edition looks at the hegemony of agile, growth of electric car, the relative decline of European business, a critique of the Olympic movement and music’s changing role as cultural signifier among other things.

Jennifer Pahlka warns against switching from the tyranny of waterfall to one focused solely on agile, calling on users to selection the right tools depending on the situation they face:

Why do we experience any of these doctrines (agile, lean, six sigma, in house, outsourced) as tyranny? Well, in the current moment, in government largely, it’s been the tyranny of waterfall, not agile. Most government IT projects have been relentlessly shoehorned into waterfall project management nightmares for the past few decades. Agile has been the knight in shining armor who rode in and broke waterfall’s grip on procurement, the key to power. But can we solve all of government’s technology needs through agile development?

Whilst electric cars are beginning to emerge in some of our major centres but their impact has so far been minimal outside of a few neighbourhoods such as Silicon Valley. Michael Liebreich and Angus McCrone provide a forecast for their future growth but more interestingly, look at some of the industries that are likely to be helped or hurt by their rise:

If it is hard to predict when phase change in complex systems begins, it is even harder to predict where it ends. No list of potential impacts of the Transformation of Transportation can be complete.  However, one thing is for sure: if our predictions for the uptake of electric vehicles are anything like correct, there is no part of the global economy which will not, in some way, be affected.

Lawrence Lenihan provides a valuable forecast for the luxury goods sector suggesting that falling barriers to entry will make it increasingly difficult for new companies to grow to the size of the current fashion giants as they’re “out-niched” by newer entrants:

The future will be about specific companies addressing specific markets

The Economist has done a comparison of the performance of leading European versus American firms and Europe has unfortunately comes up wanting with the suggestion that the continent needs to do more to enable world leading companies:

Performance of the top 500 European firms vs the top 500 American firms

The poor performance of managed funds has led more and more investors to switch to index funds but Jason Zweig looks at some of the potentially unintended consequences if investors move on mass to index funds

Index funds don’t “vote with their feet” by selling when they disagree with companies’ managers. They are quasi-permanent investors.

Because corporations know that, says Prof. Heemskerk, coziness and complacency may arise. “If you have only long-term investors, how do you keep management on their toes?” he asks. “Where are the checks and balances when you have such large block holdings?”

Branko Milanovic looks at the different cohorts that are winning and losing in the reshuffling of the world’s global income distribution:

The effects of of globalisation on income distributions in rich countries have been studied extensively. This column takes a different approach by looking at developments in global incomes from 1988 to 2008. Large real income gains have been made by people around the median of the global income distribution and by those in the global top 1%.  However, there has been an absence of real income growth for people around the 80-85th percentiles of the global distribution, a group consisting of people in ‘old rich’ OECD countries who are in the lower halves of their countries’ income distributions.

Will Chalk, Simon Maybin and Paul Brown worked with University of Maryland’s Global Terrorism Database (GTD) to better understand how deaths from terrorism in 2016 compares with previous years and with other fatalities. Let’s hope the killings stop soon:

Historical terrorism deaths in Europe

Max Fisher provides a dire report on the situation in Syria where a variety of factors mean that even analyst’s best case scenarios sounds terrible:

Professor Fearon, listing the ways that Syria’s war cannot end, said that in the best case, one side would slowly grind out a far-off victory that would merely downgrade the war into “a somewhat lower-level insurgency, terrorist attacks and so on.”

As the warm glow from the Rio Olympics recedes, Aaron Gordon takes a cold hard look at the Olympic movement and points to the one group it really serves, the spoilt sportocrats:

After every Games, there’s a tradition of determining whether or not the event was a “success.” This depends on who’s judging, and what they consider important. Usually, it’s journalists evaluating if the focus remained on athletic achievements and good TV, rather than the surrounding unpleasantness—as if the suffering of thousands and corruption of city officials is simply a regrettable side story, another disposable thread in a quadrennial reality show. But for the people who call Rio home, the Games weren’t just programing inventory for NBC to sell ads against, or the set of a late-summer blockbuster. They were real, with a real, lasting impact. From a human rights perspective, from a human perspective, attempting to determine the success of the Games is the wrong question. There has never been a successful Olympics. They’re all, as Gaffney puts it, different kinds of total disasters.

There’s been a lot of talk about the dematerialisation of content which has been particularly apparent in music with the growth of services like Spotify, Apple Music and Tidal. Mun Keat Looi profiles Japan which is proving one of the hold outs in the growth of digital music with physical artifacts maintain a hold on the consumer’s psyche, for the moment:

Sales of physical music formats as a share of total

Thiago R. Pinto looks at the changing ways we are consuming music, suggesting it’s becoming much less important as an identity signifier:

Here is the big issue. Music for new generations is not about reflecting their unique personas, but a mirror of the activity he or she is performing. Music was once a question of loyalty and identity. Today it’s a good consumed according to moments. So the musical preferences of these listeners is much more flexible and no longer the reflection of their identities.

Brian Raftery argues that despite movie studies best efforts, films are declining in cultural importance as consumers are faced with more competing options for their attention:

These movies didn’t just fail; they almost seemed to never exist in the first place, having been dismissed or disposed of almost immediately upon impact. And even if they did do OK for a weekend or two, they never reached beyond their predictable (and increasingly stratified) core audiences. Instead, they were dumbo-dropped into our ever-expanding cauldron of content, where they played to their bases, while everyone else turned to the newest videogame, or the latest Drake video, or some random “Damn, Daniel” parody.

Aleks Eror mounts a strongly worded defence of that much derided phenomenon, the hipster, pointing to  to their role in reviving neglected neighbourhoods, democratising entrepreneurialism and promoting a slightly more benevolent view of consumerism:

They’ve undoubtedly been a homogenous force, but they’ve also done some good, and if people were really honest with themselves they’d admit that hipster bashing is a manifestation of their own insecurities – hipsters are said to think that they are the definition cool, which must imply that everyone that isn’t one is not cool. Whether they are or not is up to debate, but their influence cannot be questioned.

Sun is the featured photograph from eko.

Thought Starters: look at AMP, Amazon’s dominance, corporate profits & music industry

Thought Starters provides me with a chance to review the research and opinions that I’ve read over the last week or so. This edition looks at the launch of Accelerated Mobile Pages, Amazon’s growing dominance in the digital world, rising corporate profits, the declining fortunes of the music industry and terrorism among other things.

Google’s Accelerated Mobile Pages is now out in the open. Alex Bauer profiles what it offers mobile internet users and also what is going on behind the scenes:

AMP isn’t actually new technology. In fact, AMP is what the web could have been all along, if it had been originally designed with nothing but mobile device performance in mind. This “mobile-only” approach is important because one of the ways AMP achieves its blazing-fast performance is by completely ignoring any device that is not small enough to fit in your pocket. AMP is emphatically not about making desktop websites look good on phone screens, but rather a totally separate, alternative presentation of the same content. It’s the web we already know, except stripped back to the bare essentials and then subjected to aggressive validation and rendering controls.

Alex Muir points to Facebook’s Hydra like offering as something any entrepreneur should consider as a competitor before launching a business into the B2C space:

Today, **if you’re building a service for communities or individuals then Facebook is almost certainly your biggest competitor. ** B2B: Excel, B2C: Facebook.

Ben Thompson recently profiled how Amazon is leveraging its scale in ecommerce and cloud computing to gain a near insurmountable competitive advantage. Eugene Kim’s collection of charts profiling Amazon provides a valuable complement to Thompson’s words illustrating what a behemoth the organisation present (at least in the US):

Amazon's long term growth

Bastion of free market economics, The Economist has made a convincing argument that the US economy needs more competition (and regulation) pointing to growing concentration and rising profits among the country’s leading firms:

Even better at making money

Scott Santens joins the chorus of voices raising concerns about the threat automation poses to employment with Google DeepMind’s AlphaGo illustrating the major advances in artificial intelligence capabilities which could upturn society as we know it:

No nation is yet ready for the changes ahead. High rates of labor force nonparticipation leads to social instability, as does a lack of consumers within consumer economies. It turns out, humans are good at designing things, but not so great at picturing a world that their technology will create. What’s the big lesson to learn, in a century when machines can learn? Maybe it is that jobs are for machines, and life is for people.

Ben Sisario and Karl Russell profile the declining fortunes of the music industry over the last ten years with growth streaming services and vinyl sales failing to fill the hole left by declining CD sales. Whilst the figures don’t allow for revenues from other revenue streams such as concerts, sponsorship and branded content initiatives, overall, the picture isn’t particularly healthy: 

Music industry revenues

An interview with Michael Rosenfeld sheds some light on how online dating is (and isn’t) changing the nature of relationships in the 21st century:

I don’t think that that theory, even if it’s true for something like jam, applies to dating. I actually don’t see in my data any negative repercussions for people who meet partners online. In fact, people who meet their partners online are not more likely to break up — they don’t have more transitory relationships. Once you’re in a relationship with somebody, it doesn’t really matter how you met that other person. There are online sites that cater to hookups, sure, but there are also online sites that cater to people looking for long-term relationships. What’s more, many people who meet in the online sites that cater to hookups end up in long-term relationships. This environment, mind you, is just like the one we see in the offline world.

The rise of Donald Trump is one of the more interesting (and scary) phenomenons in the US’s current election cycle. Clare Malone looks at where Trump’s support comes from:

The Upshot’s look at the geography of Trumpism showed a number of variables linked to areas of deep Trump support — counties where a high proportion of the population is white with no high school diploma, where there are large numbers of mobile homes, and where there is a poor labor-force participation rate. Political scientists Michael Tesler and John Sides recently pointed to new research that shows “both white racial identity and beliefs that whites are treated unfairly are powerful predictors of support for Donald Trump in the Republican primaries.”

Whilst playing to race is an important part of Donald Trump’s success, changing demographics point to a strategy of appealing to America’s white population as becoming increasingly untenable in the future according to Pew Research forecasts:

The changing face of America

The recent terrorist attack has led to an inevitable concerns among Europeans about their personal safety. Annalisa Merelli’s analysis of deaths and injuries from terror attacks in Western Europe point to the region being no more dangerous than in the recent past although digital media is no doubt amplifying current fears:

Dead and injured in terror attacks in Western Europe

The featured image shows a Hazul Luzah mural from Underground Paris’ interview with the Portuguese artist.

Who to follow on Twitter

There’s been a lot of talk in the press recently about Twitter’s move to an algorithmic feed. There’s definite potential if it eases the burden of sifting through our current feed but there’s a real risk that in doing so, Twitter might loose the ‘special sauce’ that makes it so attractive to its current users (it’s worth reading Adam D’Angelo on this).

I figured now might be a good time to give a plug for the Twitter accounts that provide me with a healthy signal to noise ratio and generally avoid double posting (my current pet hate).

Tech, Startups, Media and Marketing

Balaji S. Srinivasan tech analyst, CEO of 21 inc of, board partner of Andreessen Horowitz and blockchain fan.

Ben Thompson technology analyst behind the Stratechery blog and host of the Exponent podcast.

Benedict Evans technology analyst with a focus on mobile who is now working as partner at Andreessen Horowitz. Apparently not a great fan of cultural world of San Francisco despite living there.

Chris Dixon Hunch founder and another Andreessen Horowitz with pointers on the world of technology and startups.

Ian Maude UK based technology, media and internet analyst working for the Be Heard Group.

Marc Andreessen cofounder of Netscape, Loudcloud and now Andreessen Horowitz with strong opinions on technology, economics, the world of startups and politics (libertarian). Bit more noise to signal than the other recommendations.

Om Malik technology analyst, founder of GigaOm and now partner at True Ventures

News and Analysis

If You Only…  Matter cofounder Bobbie Johnson provides a recommended long form journalism read each day.

Max Roser: typically provides an antidote to the naysayers of the world with data that point to human development around the world.

The Economist Daily Charts: provides a regular feed of charts, maps and infographics shedding light on issues in the news.

Tim Harford, journalist who writes as the Undercover Economist at the Financial Times and presenter of More or Less on Radio 4. Great for shining light on some of the issues that matter.

Cycling

Inner Ring: providing updates on the Inner Ring website and announcements from the world of professional cycling

And Me…

Finally, if you’re interested in following me on Twitter, more digital content can be found here and if you like riding bikes there’s here as well.

The featured image is No Amnesia by Pastel in West Palm Beach, Florida, USA

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

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

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

Comparison growth monthly active users of Facebook and Twitter

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

Which leisure activities are twentysomethings spending more time on?

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

What would children miss

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

Smart device penetration in Europe

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

Facebook Messenger 2015 highlights

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

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

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

Marketing budgets continue to grow

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

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

Staff cuts at the World's biggest banks

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

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

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

China Battles to Shore Up World's Priciest Stock Market

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

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

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

Recent changes to crossing Europe's borders

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

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

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

The Big Mac Index

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

The featured mural is by eko from his Flickr page.

Thought Starters: the outlook for the global and the Chinese economy, India’s middle class, the growing importance of migration and publishing in the digital age

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 looks at forecasts for the year ahead, China’s economy and India’s middle class, migration’s growing role in contemporary societies, publishing in the digital age and lots more.

The Economist has published its forecast for the global economy which sees a further shift in momentum from emerging to developed markets, although India, China and Indonesia are seen as top performers:

Emerging markets losing their grips

Malcolm Scott takes a closer look at the slowdown in China’s economy, suggesting that it’s not nearly as significant as some of the more vociferous critics are suggesting:

China's slowdown in context

India as The Economist’s figures above suggest, is one of the powerhouses of the global economy and the country’s growing middle class is seen as providing enormous opportunities for local and international brands. The problem is there are wide variations in estimates of India’s middle class depending on the spending power you apportion to the Indian rupee as the Research Unit for Political Economy shows:

Some estimates of India's middle class

The Wall Street Journal in its profile of demographic trends has taken a closer look at the globe’s growing migrant population. Kim Mackrael and Charles Forelle in their broader analysis of immigration contrast Canada’s more assimilationist and economically driven policies with those of Europe. Whilst I’d argue that Europe is currently in a very different position to Canada due to its proximity to Syria, it does provide some valuable pointers as the continent faces an ageing population:

A growing migrant pool

Angus Hervey provides an important reminder that for many important human development indicators things are on the up (although this is certainly no argument for complacency). Among the indicators he points to are reductions in poverty, malnutrition, polio, infant mortality and AIDS deaths and improvements in universal education, internet access and financial inclusion:

Global poverty has reached a record low

Felix Salmon looks at the maturing of the fintech sector as it  focuses on providing tangible improvements on services offered rather than rhetoric about turning the financial sector upside down:

The problems such fintech companies are trying to solve aren’t the type that can be tackled by a few hyperactive coders in a garage. Rather, they require dozens of different skillsets, not to mention the ability to manage them all. In that sense, the startups are becoming much more like the banks they’re seeking to disrupt. That’s Lunn’s Great Convergence. No one believes the banks are going to solve these problems. The trillion-dollar question is, can the fintech companies do something important and socially useful before they, like the banks, become bogged down in regulation and bureaucracy.

Om Malik reports on how the movement towards a software enabled world has moved a lot of business categories into a winner takes all market (eg Amazon, Uber, Google). It’s also worth adding that innovations in technology and business strategy can see even these advantages quickly fall over time if management aren’t vigilant:

This loop of algorithms, infrastructure, and data is potent. Add what are called network effects to the mix, and you start to see virtual monopolies emerge almost overnight. A network effect occurs when the value of a product or service goes up with the number of people using it. The Ethernet inventor Bob Metcalfe called it Metcalfe’s Law. Telephone services, eBay, and Skype are good examples of the network effects at work. The more people who are on Skype, the more people you can call, and thus the more likely it is that someone will join.

While physical book sales in the US are on the up according to Nielsen BookScan figures, ebooks are heading in the opposite direction with a consolidation around the Kindle and Kobo platforms according to Michael Kozlowski’s report:

In a few short years most digital bookstores will be out of business and Amazon and Kobo will likely be the only players left standing.  The only digital bookstores that will survive will be companies offering both hardware/software solutions to encapsulate people into their walled gardens.  The destruction of the digital book market has already been set in motion and nothing will stop from the industry from collapsing.

In 2013 Amazon created a media storm by announcing they were working on drone delivery with commentators debating whether this was a real story or a public relations stunt. Two years on and the pathway to drone delivery looks clearer. Dan Wang looks at where drone logistics have proven successful and where we’re likely to see it make real inroads in the near future:

Amazon Drones vs Current Delivery Options

As we start a new year we’re seeing various commentators giving their prognosis for the year ahead. Fred Wilson and Bob O’Donnell make good starting points.

Finally, it’s worth watching Extra Credit’s review of China’s Sesame Credit which has seen the Chinese Government collaborate with Tencent and Alibaba on gamifying good behaviour by Chinese citizens. A case of Nudge theory heading in a distinctly dystopian direction:

The featured image is an INTI mural from the Artesano Project in Nagua, Dominican Republic.

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

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

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

Main social media site used by children

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

Google App Streaming

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

Mobile commerce as share of total ecommerce revenues

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

Retail space decline

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

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

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

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

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

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

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

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

Media Spend Forecast

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

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

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

Manufacturing as percentage of GDP

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

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

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

The History of Privacy

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

The glass-ceiling index

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

How the U.S. public became less religious

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

Thought Starters: 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: decacorns, the iPad Pro opportunity and the implications of CRISPR

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.

CB Insights profiles the growing valuations of the “decacorns” (private companies valued at over $10bn). Fidelity’s recent markdown of investments in Dropbox and Snapchat could be simply related to these companies’ specific circumstances or potential sign of a market correction:

Deals to Top Private Company Unicorns Valued at Over $10bn

Apple’s hoping that the release of the iPad Pro will give its tablet offering a much needed boost and the product’s performance mean that the iPad will be seen increasingly as a device to create as well as consume as John Gruber comments:

“We’ve now reached an inflection point. The new MacBook is slower, gets worse battery life, and even its cheapest configuration costs $200 morethan the top-of-the-line iPad Pro. The iPad Pro is more powerful, cheaper, has a better display, and gets better battery life. It’s not a clear cut-and-dry win — MacBooks still have more RAM (the iPad Pro, in all configurations, has 4 GB of RAM, although Apple still isn’t publishing this information — MacBook Pros have either 8 or 16 GB), are expandable, and offer far more storage. But at a fundamental level — CPU speed, GPU speed, quality of the display, quality of the sound output, and overall responsiveness of interface — the iPad Pro is a better computer than a MacBook or MacBook Air, and a worthy rival to the far more expensive MacBook Pros.”

One of the trends driving growth in a new range of startups is the shift to smartphones which is profiled in these global figures from Creative Strategies:

Percentage of time spent by device

90% of the time consumers spend on smartphones is spent in apps according to Flurry figures with Facebook, Google and Apple dominating in terms of the reach of their apps according to comScore figures:

Top 15 Smartphone Apps

Britney Summit-Gil looks at how the internet has enabled consumers to be better informed on a whole host of issues, but has lagged when it comes to understanding their own communities:

Internet users say digital tech makes them better informed than 5 years ago

Online advertising has been criticised for providing metrics that fail to reflect audience exposure.  Seb Joseph explores The Economist’s move to offer attention metrics which will better reflect consumers’ actual exposure to advertising:

“Working with analytics partners Chartbeat and Moat Analytics, The Economist tracks active time view – only counting a view when an ad is in view and the reader is actively engaged, i.e typing or scrolling up and down the page. Only those impressions that generate over 5 seconds of active view time will count towards the attention buy.”

Before brands throw all their media budget behind these new online advertising opportunities, it’s worth considering GroupM research which points to television’s lead in generating short to medium term sales (bearing in mind the research was commissioned by TV marketing body Thinkbox):

“GroupM found that media account for on average 39% of sales in the short to medium term (within three months of a campaign finishing); 33% of these media-driven sales are from TV advertising, more than any other communication channel. Paid-for online search created 22%, online display 12%, affiliates 10%, print 8%, direct mail 8%, radio 3% and outdoor 1%.”

Online media also needs to contend with declines in referral traffic from Facebook according to a report from Matthew Ingram. It’s far from clear  whether this is a result of a content glut or Facebook dialing back traffic but it does highlight how vulnerable mainstream content providers are to changes by Facebook and other intermediaries:

“The other nagging fear for media companies is that Facebook is essentially engaging in a large-scale bait and switch, by encouraging them to host all of their output on its platform, but then gradually turning off the traffic tap so that their reach declines. At that point, the social network can recommend a number of ways to boost the reach again—including by paying for promoted posts and other forms of advertising. Facebook would no doubt protest that it is doing nothing of the kind, but the fear remains.”

Michael Specter profiles the growing opportunities to manipulate our DNA with CRISPR/Cas system whilst Erik Parens chooses to explore the ethical implications of gene editing:

‘That seemingly simple question takes us to the heart of a deep tension that decent parents have felt for a very long time, but that will become ever more intense if a technology such as CRISPR-Cas9 is in fact safe and effective. I refer here to the tension between the ethical obligation of parents to accept their children as they are, and their ethical obligation to shape them.”

Rising wages in China mean that the country is facing growing competition for the title of factory to the world with Mexico also benefiting from its close proximity to the US according to a report from Ana Campoy:

Productivity Adjusted Labour Rates

UNHCR figures put the sheer scale of Europe’s refugee crisis in perspective, with the problem unlikely to abate given conflict in Syria and Afghanistan:

Migrant arrivals via the Mediterranean

If you find yourself in London over the next month, I’d strongly recommend checking out Ragnar Kjartansson’s The Visitors exhibition at the Brewer Street Car Park. A wonderful respite from the increasingly frenetic activity of central London in Christmas shopping mode.

The featured image is a Jessie and Katey mural on Ahui Street in Hawaii for the POW WOW festival.

Thought Starters: potential for micropayments, notifications and a closer look at WeWork

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

As the online media sector grapples with the impact of ad blockers on their business model, we’re likely to see growing interest in micropayments. Frédéric Filloux profiles Dutch platform Blendle and how their business model takes a collaborative approach with media operators:

“Blendle benefits from exceptionally favorable trade winds. The traditional advertising model is crumbling under the pressure of programmatic buying and of the pervasiveness of adblockers. In addition, Blendle also takes advantage of limitations in paywall models that mostly target the heavy, affluent users segment, but exclude the younger audiences that are Blendle’s main target (today two-third of Blendle users are under 35). From the legacy media perspective, this makes the paid-by-the-article system more attractive than ever.”

Figures from comScore in the US point to mobile and tablet app usage following the power law with a few apps monopolising consumers’ attention:Time spent per app

John Borthwick profiles the role of notifications as the smartphone becomes the centre of our digital lives:

“Right now we are witnessing another round of unbundling as the notification screen becomes the primary interface for mobile computing. It’s easy to get fixated with notifications as a feature — they are a feature for an app. But they are also part of this broader unbundling cycle and they are part of an architectural shift from pull to a push. It’s an interesting time.”

Steve Cheney looks at how Apple has used its expertise in microchips to carve out a competitive advantage in smartphones with potential to do the same in other market categories.

WeWork is positioning itself more as disruptive tech startup rather than traditional property company as a means of buttressing its market valuation. Nitasha Tiku takes a closer look and asks whether the company is really that different from more traditional commercial property providers:

“These slides show how easy it is to create a good-looking growth curve — not just for WeWork, but for all of its peers in the current tech climate. “You put together a model. It spits out whatever it spits out based on the inputs,” Sussman told BuzzFeed News. “I always say, ‘If you gave David Copperfield or Harry Potter Microsoft Excel, they could do even more amazing magic.’” The basis for WeWork’s five-year forecasts, he said, all rests on its assumptions. “Key metrics like membership growth, pricing, and square footage leased drive the whole model. Change those inputs and everything changes.” Input in, pivot out.”

On the topic of startups and their respective valuations, the following slide provides an interesting look at how Slack is miles ahead in terms of the value of each customer according to L2:

Valuations per user

Having grown up (at least initially) with the printed word, it’s fascinating to see the growth of YouTube as an information channel for the under 55s according to Ofcom research:

Sources used when looking for information online

The Pew Research Center has released figures looking at how social media usage has changed over the last 10 years. No great revelations but an interesting window into how usage has grown and how it does (or doesn’t) vary by age, gender, education and income:

Social Media vs Income

Corporate taxation (or the lack thereof) continues to pop up in the headlines with Facebook apparently paying out just £4,327 in tax UK despite giving out £35m in staff bonuses according to a Guardian report. Among the tricks of the trade are the use of offshore shore bases which The Economist highlights with FDI inflows:

FDI inflows as percentage of GDP

Using figures from the American Community Survey, the United States Census Bureau points to women overtaking men in having a bachelor degree or higher in the US (although pay equity looks much further off):

Comparison of Gender vs Tertiary Qualification in US

Whilst Britain’s role in Europe may be in question with talk of Brexit, English becomes increasingly dominant among languages taught in primary schools in the European Union according to the Pew Research Center:

Growing dominance of English language in Europe

The featured image is Dark Perimeter / Basic Primary Shapes by the Argentinian artist Elian Chali for Nuit Blanche in Brussels and published in StreetArtNews.

Thought Starters: innovation, incomes, employment and happiness

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

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

Global Innovation Ranking

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

Real Median Household Income

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

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

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

Working Age Population

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

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

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

European Household Spending

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

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

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

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

Facebook Pages Update

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

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