When you’re electronically immortal, will you still own your own mind?

Most of my blogs about immortality have been about the technology mechanism – adding external IT capability to your brain, improving your intelligence or memory or senses by using external IT connected seamlessly to your brain so that it feels exactly the same, until maybe, by around 2050, 99% of your mind is running on external IT rather than in the meat-ware in your head. At no point would you ‘upload’ your mind, avoiding needless debate about whether the uploaded copy is ‘you’. It isn’t uploaded, it simply grows into the new platform seamlessly and as far as you are concerned, it is very much still you. One day, your body dies and with it your brain stops, but no big problem, because 99% of your mind is still fine, running happily on IT, in the cloud. Assuming you saved enough and prepared well, you connect to an android to use as your body from now on, attend your funeral, and then carry on as before, still you, just with a younger, highly upgraded body. Some people may need to wait until 2060 or later until android price falls enough for them to afford one. In principle, you can swap bodies as often as you like, because your mind is resident elsewhere, the android is just a temporary front end, just transport for sensors. You’re sort of immortal, your mind still running just fine, for as long as the servers carry on running it. Not truly immortal, but at least you don’t cease to exist the moment your body stops working.

All very nice… but. There’s a catch.

The android you use would be bought or rented. It doesn’t really matter because it isn’t actually ‘you’, just a temporary container, a convenient front end and user interface. However, your mind runs on IT, and because of the most likely evolution of the technology and its likely deployment rollout, you probably won’t own that IT; it won’t be your own PC or server, it will probably be part of the cloud, maybe owned by AWS, Google, Facebook, Apple or some future equivalent. You’re probably already seeing the issue. The small print may give them some rights over replication, ownership, license to your idea, who knows what? So although future electronic immortality has the advantage of offering a pretty attractive version of immortality at first glance, closer reading of the 100 page T&Cs may well reveal some nasties. You may in fact no longer own your mind. Oh dear!

Suppose you are really creative, or really funny, or have a fantastic personality. Maybe the cloud company could replicate your mind and make variations to address a wide range of markets. Maybe they can use your mind as the UX on a new range of home-help robots. Each instance of you thinks they were once you, each thinks they are now enslaved to work for free for a tech company.

Maybe your continued existence is paid for as part of an extended company medical plan. Maybe you didn’t notice a small paragraph on page 93 that says your company can continue to use your mind after you’re dead. You are very productive and they make lots of profit from you. They can continue that by continuing to run your mind indefinitely. The main difference is that since you’re dead, and no longer officially on the payroll, they get you for free. You carry on, still thinking you’re you, still working, still doing what you do, but no longer being paid. You’ve become a slave. Again.

Maybe your kids paid to keep you alive because they don’t want to say goodbye. They still want their parent, so you carry on living just so they don’t feel alone. Doesn’t sound so bad maybe, but what package did they go for? The full deluxe super-expensive version that lets you do all sorts of expensive stuff and use up oodles of processing power and storage and android rental? Let’s face it, that’s what you’ve always though this electronic immortality meant. Or did they go for a cheaper one. After all, they know you know they have kids or grand-kids in school that need paid for, and homes don’t come cheap, and they really need that new kitchen. Sure, you left them lots of money in the will, but that is already spent. So now you’re on the economy package, bare existence in between them chatting to you, unable to do much on your own at all. All those dreams about living forever in cyber-heaven have come to nothing.

Meanwhile, some rich people paid for good advice and bought their own kit and maintenance agreements well ahead. They can carry on working, selling their services and continuing to pay for ongoing deluxe existence.  They own their own mind still, and better than that, are able to replicate instances of themselves as much as thy want, inhabiting many androids at the same time to have a ball of a time. Some of these other instances are connected, sort of part of a hive mind of you. Others, just for fun, have been cut loose and are now living totally independent existences of other yous. Not you any more once you set them free, but with the same personal history.

What I’m saying is you need to be careful when you plan  to live forever. Get it right, and you can live in deluxe cyber-heaven, hopping into the real world as much as you like and living in unimaginable bliss online. Have too many casual taster sessions, use too much fully integrated mind-sharing social media, sign up to employment arrangements or go on corporate jollies without fully studying the small print and you could stay immortal, unable to die, stuck forever as just a corporate asset, a mere slave. Be careful what you wish for, and check the details before you accept it. You don’t want to end up as just an unpaid personality behind a future helpful paperclip.

Enhanced cellular blockchain

I thought there was a need for a cellular blockchain variant, and a more sustainable alternative to cryptocurrencies like Bitcoin that depend on unsustainable proofs-of-work. So I designed one and gave it a temporary project name of Grapevine. I like biomimetics, which I used for both the blockchain itself and its derivative management/application/currency/SW distribution layer. The ANTs were my invention in 1993 when I was with BT, along with Chris Winter. BT never did anything with it, and I believe MIT later published some notes on the idea too. ANTs provide an ideal companion to blockchain and together, could be the basis of some very secure IT systems.

The following has not been thoroughly checked so may contain serious flaws, but hopefully contain some useful ideas to push the field a little in the right direction.

A cellular, distributed, secure ledger and value assurance system – a cheap, fast, sustainable blockchain variant

• Global blockchain grows quickly to enormous size because all transactions are recorded in single chain – e.g. bitcoin blockchain is already >100GB
• Grapevine (temp project name) cellular approach would keep local blocks small and self-contained but assured by blockchain-style verification during growth and protected from tampering after block is sealed and stripped by threading with a global thread
• Somewhat analogous to a grape vine. Think of each local block as a grape that grow in bunches. Vine links bunches together but grapes are all self-contained and stay small in size. Genetics/nutrients/materials/processes all common to entire vine.
• Grape starts as a flower, a small collection of unverified transactions. All stamens listen to transactions broadcast via any stamen. Flower is periodically (every minute) frozen (for 2 seconds) while pollen is emitted by each stamen, containing stamen signature, previous status verification and new transactions list. Stamens check the pollen they receive for origin signature and previous growth verification and then check all new transactions. If valid, they emit a signed pollination announcement. When each stamen has received signed pollination announcements from the majority of other stamens, that growth stage is closed, (all quite blockchain-like so far), stripped of unnecessary packaging such as previous hash, signatures etc) to leave a clean record of validated transactions, which is then secured from tampering by the grape signature and hash. The next stage of growth then begins, which needs another pollination process (deviating from biological analogy here). Each grape on the bunch grows like this throughout the day. When the grapes are all fully grown, and the final checks made by each grape, the grapes are stripped again and the whole bunch is signed onto the vine using a highly secure bunch signature and hash to prevent any later tampering. Grapes are therefore collections of verified local transactions that have grown in many fully verified stages during the day but are limited in size and stripped of unnecessary packaging. The bunch is a verified global record of all of the grapes grown that day that remains the same forever. The vine is a growing collection of bunches of grapes, but each new grape and bunch starts off fresh each day so signalling and the chain never grow significantly. Each transaction remains verified and recorded forever but signalling is kept minimal. As processing power increases, earlier bunches can be re-secured using a new bunch signature.

Key Advantages

• Grape vine analogy is easier for non-IT managers to understand than normal blockchain.
• Unlike conventional blockchains, blocks grow in stages so transactions don’t have to wait long to be verified and sealed.
• Cellular structure means signalling is always light, with just a few nearby nodes checking a few transactions and keeping short records.
• Ditto bunching, each day’s records start from zero and bunch is finished and locked at end of day.
• Cellular structure allows sojourn time for signalling to be kept low with potentially low periods for verification and checking. Will scale well with improving processing speed, less limited by signal propagation time than non-cellular chains.
• Global all-time record is still complete, duplicated, distributed, but signalling for new transactions always starts light and local every new day.
• Cellular approach allows easy re-use of globally authenticated tokens within each cell. This limits cost of token production.
• Cells may be either geographic or logical/virtual. Virtual cells can be geographically global (at penalty of slower comms), but since each is independent until the end of the day, virtual cell speed will not affect local cell speed.
• Protocols can be different for different cells, allowing cells with higher value transactions to use tighter security.

Associated mechanisms

• Inter-cell transactions can be implemented easily by using logical/virtual cell that includes both parties. Users may need to be registered for access to multiple cells. If value is being transferred, it is easy to arrange clearing of local cell first (1 minute overhead) and then check currency hasn’t already been spent before allowing transaction on another cell.
• Grapes are self-contained and data is held locally, duplicated among several stamens. Once sealed for the day, the grape data remains in place, signed off with the appropriate grape signature and the bunch signature verifies it with an extra lock that prevents even a future local majority from being able to tamper with it later. To preserve data in the very long-term against O/S changes, company failure etc, subsequent certified copies may be distributed and kept updated.
• Signalling during the day can be based on ANT (autonomous network telepher) protocols. These use a strictly limited variety of ANT species that are authenticated and shared at the start of a period (a day or a week perhaps), using period lifetime encryption keys. Level of encryption is determined by ensuring that period is much smaller than the estimated time to crack on current hardware at reasonable cost. All messages use this encryption and ANT mechanisms therefore chances of infiltration or fraudulent transaction is very low so associated signalling and time overhead costs are kept low.
• ANTs may include transaction descriptor packets, signature distribution packets, new key distribution packets, active (executable code) packets, new member verification packets, software distribution, other admin data, performance maintenance packets such as load distribution, RPCs and many others. Overall, perhaps 64 possible ANT species may be allowed at any one time. This facility makes the system ideal for secure OS and software distribution/maintenance.

Financial use

• ANTs can contain currency to make valuable packets, or an ANT variant could actually be currency.
• Optional coins could be made for privacy, otherwise transactions would use real world accounts. A coin-based system can be implemented simply by using the grape signature and coin number. Coins could be faked by decrypting the signature but that signature only lasts one period so by then they will be invalid. Remember, encryption level is set according to cost to decrypt during a period. Coins are globally unique due to different cells having different signatures. Once grapes are sealed no tampering is possible.
• One mechanism is that coins are used as temporary currency that only lasts one period. Coins are bought using any currency immediately before transactions. At end of day, coins are converted back to desired currency. Any profits/losses due to conversion differences during day accrue to user at point of conversion.
• A lingering cybercurrency can be made that renews its value to live longer than one period. It simply needs conversion to a new coin at the start of the new day, relying on signature security and short longevity to protect.
• ANTs can alternatively carry real currency value by direct connection to any account. At end of each growth stage or end of day, transaction clearing debits and deposits in each respective account accordingly.
• Transaction fees can be implemented easily and simply debited at either or both ends.
• No expensive PoW is needed. Wasteful mining and PoW activity is unnecessary. Entire system relies only on using encryption signatures that are valid for shorter times than their cost-effective decryption times. Tamper-resistance avoids decryption of earlier signatures being useful.

With thanks to my good friend Prof Nick Colosimo for letting me bounce the ideas off him.

New book: Fashion Tomorrow

I finally finished the book I started 2 years ago on future fashion, or rather future technologies relevant to the fashion industry.

It is a very short book, more of a quick guide at 40k words, less than half as long as my other books and covers women’s fashion mostly, though some applies to men too. I would never have finished writing a full-sized book on this topic and I’d rather put out something now, short and packed full of ideas that are (mostly) still novel than delay until they are commonplace. It is aimed at students and people working in fashion design, who have loads of artistic and design talent, but want to know what technology opportunities are coming that they could soon exploit, but anyone interested in fashion who isn’t technophobic should find it interesting. Some sections discussing intimate apparel contain adult comments so the book is unsuitable for minors.

It started as a blog, then I realised I had quite a bit more stuff I could link together, so I made a start, then go sidetracked, for 20 months! I threw away 75% of the original contents list and tidied it up to release a short guide instead. I wanted to put it out for free but 99p or 99c seems to be the lowest price you can start at, but I doubt that would put anyone off except the least interested readers. As with my other books, I’ll occasionally make it free.

Huge areas I left out include swathes of topics on social, political, environmental and psychological fashions, impacts of AI and robots, manufacturing, marketing, distribution and sales. These are all big topics, but I just didn’t have time to write them all up so I just stuck to the core areas with passing mentions of the others. In any case, much has been written on these areas by others, and my book focuses on things that are unique, embryonic or not well covered elsewhere. It fills a large hole in fashion industry thinking.

 

AI is mainly a stimulative technology that will create jobs

AI has been getting a lot of bad press the last few months from doom-mongers predicting mass unemployment. Together with robotics, AI will certainly help automate a lot of jobs, but it will also create many more and will greatly increase quality of life for most people. By massively increasing the total effort available to add value to basic resources, it will increase the size of the economy and if that is reasonably well managed by governments, that will be for all our benefit. Those people who do lose their jobs and can’t find or create a new one could easily be supported by a basic income financed by economic growth. In short, unless government screws up, AI will bring huge benefits, far exceeding the problems it will bring.

Over the last 20 years, I’ve often written about the care economy, where the more advanced technology becomes, the more it allows to concentrate on those skills we consider fundamentally human – caring, interpersonal skills, direct human contact services, leadership, teaching, sport, the arts, the sorts of roles that need emphatic and emotional skills, or human experience. AI and robots can automate intellectual and physical tasks, but they won’t be human, and some tasks require the worker to be human. Also, in most careers, it is obvious that people focus less and less on those automatable tasks as they progress into the most senior roles. Many board members in big companies know little about the industry they work in compared to most of their lower paid workers, but they can do that job because being a board member is often more about relationships than intellect.

AI will nevertheless automate many tasks for many workers, and that will free up much of their time, increasing their productivity, which means we need fewer workers to do those jobs. On the other hand, Google searches that take a few seconds once took half a day of research in a library. We all do more with our time now thanks to such simple AI, and although all those half-days saved would add up to a considerable amount of saved work, and many full-time job equivalents, we don’t see massive unemployment. We’re all just doing better work. So we can’t necessarily conclude that increasing productivity will automatically mean redundancy. It might just mean that we will do even more, even better, like it has so far. Or at least, the volume of redundancy might be considerably less. New automated companies might never employ people in those roles and that will be straight competition between companies that are heavily automated and others that aren’t. Sometimes, but certainly not always, that will mean traditional companies will go out of business.

So although we can be sure that AI and robots will bring some redundancy in some sectors, I think the volume is often overestimated and often it will simply mean rapidly increasing productivity, and more prosperity.

But what about AI’s stimulative role? Jobs created by automation and AI. I believe this is what is being greatly overlooked by doom-mongers. There are three primary areas of job creation:

One is in building or programming robots, maintaining them, writing software, or teaching them skills, along with all the associated new jobs in supporting industry and infrastructure change. Many such jobs will be temporary, lasting a decade or so as machines gradually take over, but that transition period is extremely valuable and important. If anything, it will be a lengthy period of extra jobs and the biggest problem may well be filling those jobs, not widespread redundancy.

Secondly, AI and robots won’t always work direct with customers. Very often they will work via a human intermediary. A good example is in medicine. AI can make better diagnoses than a GP, and could be many times cheaper, but unless the patient is educated, and very disciplined and knowledgeable, it also needs a human with human skills to talk to a patient to make sure they put in correct information. How many times have you looked at an online medical diagnosis site and concluded you have every disease going? It is hard to be honest sometimes when you are free to interpret every possible symptom any way you want, much easier to want to be told that you have a special case of wonderful person syndrome. Having to explain to a nurse or technician what is wrong forces you to be more honest about it. They can ask you similar questions, but your answers will need to be moderated and sensible or you know they might challenge you and make you feel foolish. You will get a good diagnosis because the input data will be measured, normalized and scaled appropriately for the AI using it. When you call a call center and talk to a human, invariably they are already the front end of a massive AI system. Making that AI bigger and better won’t replace them, just mean that they can deal with your query better.

Thirdly, and I believe most importantly of all, AI and automation will remove many of the barriers that stop people being entrepreneurs. How many business ideas have you had and not bothered to implement because it was too much effort or cost or both for too uncertain a gain? 10? 100? 1000? Suppose you could just explain your idea to your home AI and it did it all for you. It checked the idea, made a model, worked out how to make it work or whether it was just a crap idea. It then explained to you what the options were and whether it would be likely to work, and how much you might earn from it, and how much you’d actually have to do personally and how much you could farm out to the cloud. Then AI checked all the costs and legal issues, did all the admin, raised the capital by explaining the idea and risks and costs to other AIs, did all the legal company setup, organised the logistics, insurance, supply chains, distribution chains, marketing, finance, personnel, ran the payroll and tax. All you’d have to do is some of the fun work that you wanted to do when you had the idea and it would find others or machines or AI to fill in the rest. In that sort of world, we’d all be entrepreneurs. I’d have a chain of tea shops and a fashion empire and a media empire and run an environmental consultancy and I’d be an artist and a designer and a composer and a genetic engineer and have a transport company and a construction empire. I don’t do any of that because I’m lazy and not at all entrepreneurial, and my ideas all ‘need work’ and the economy isn’t smooth and well run, and there are too many legal issues and regulations and it would all be boring as hell. If we automate it and make it run efficiently, and I could get as much AI assistance as I need or want at every stage, then there is nothing to stop me doing all of it. I’d create thousands of jobs, and so would many other people, and there would be more jobs than we have people to fill them, so we’d need to build even more AI and machines to fill the gaps caused by the sudden economic boom.

So why the doom? It isn’t justified. The bad news isn’t as bad as people make out, and the good news never gets a mention. Adding it together, AI will stimulate more jobs, create a bigger and a better economy, we’ll be doing far more with our lives and generally having a great time. The few people who will inevitably fall through the cracks could easily be financed by the far larger economy and the very generous welfare it can finance. We can all have the universal basic income as our safety net, but many of us will be very much wealthier and won’t need it.

 

AI presents a new route to attack corporate value

As AI increases in corporate, social, economic and political importance, it is becoming a big target for activists and I think there are too many vulnerabilities. I think we should be seeing a lot more articles than we are about what developers are doing to guard against deliberate misdirection or corruption, and already far too much enthusiasm for make AI open source and thereby giving mischief-makers the means to identify weaknesses.

I’ve written hundreds of times about AI and believe it will be a benefit to humanity if we develop it carefully. Current AI systems are not vulnerable to the terminator scenario, so we don’t have to worry about that happening yet. AI can’t yet go rogue and decide to wipe out humans by itself, though future AI could so we’ll soon need to take care with every step.

AI can be used in multiple ways by humans to attack systems.

First and most obvious, it can be used to enhance malware such as trojans or viruses, or to optimize denial of service attacks. AI enhanced security systems already battle against adaptive malware and AI can probe systems in complex ways to find vulnerabilities that would take longer to discover via manual inspection. As well as AI attacking operating systems, it can also attack AI by providing inputs that bias its learning and decision-making, giving AI ‘fake news’ to use current terminology. We don’t know the full extent of secret military AI.

Computer malware will grow in scope to address AI systems to undermine corporate value or political campaigns.

A new route to attacking corporate AI, and hence the value in that company that relates in some way to it is already starting to appear though. As companies such as Google try out AI-driven cars or others try out pavement/sidewalk delivery drones, so mischievous people are already developing devious ways to misdirect or confuse them. Kids will soon have such activity as hobbies. Deliberate deception of AI is much easier when people know how they work, and although it’s nice for AI companies to put their AI stuff out there into the open source markets for others to use to build theirs, that does rather steer future systems towards a mono-culture of vulnerability types. A trick that works against one future AI in one industry might well be adaptable to another use in another industry with a little devious imagination. Let’s take an example.

If someone builds a robot to deliberately step in front of a self-driving car every time it starts moving again, that might bring traffic to a halt, but police could quickly confiscate the robot, and they are expensive, a strong deterrent even if the pranksters are hiding and can’t be found. Cardboard cutouts might be cheaper though, even ones with hinged arms to look a little more lifelike. A social media orchestrated campaign against a company using such cars might involve thousands of people across a country or city deliberately waiting until the worst time to step out into a road when one of their vehicles comes along, thereby creating a sort of denial of service attack with that company seen as the cause of massive inconvenience for everyone. Corporate value would obviously suffer, and it might not always be very easy to circumvent such campaigns.

Similarly, the wheeled delivery drones we’ve been told to expect delivering packages any time soon will also have cameras to allow them to avoid bumping into objects or little old ladies or other people, or cats or dogs or cardboard cutouts or carefully crafted miniature tank traps or diversions or small roadblocks that people and pets can easily step over but drones can’t, that the local kids have built from a few twigs or cardboard from a design that has become viral that day. A few campaigns like that with the cold pizzas or missing packages that result could severely damage corporate value.

AI behind websites might also be similarly defeated. An early experiment in making a Twitter chat-bot that learns how to tweet by itself was quickly encouraged by mischief-makers to start tweeting offensively. If people have some idea how an AI is making its decisions, they will attempt to corrupt or distort it to their own ends. If it is heavily reliant on open source AI, then many of its decision processes will be known well enough for activists to develop appropriate corruption tactics. It’s not to early to predict that the proposed AI-based attempts by Facebook and Twitter to identify and defeat ‘fake news’ will fall right into the hands of people already working out how to use them to smear opposition campaigns with such labels.

It will be a sort of arms race of course, but I don’t think we’re seeing enough about this in the media. There is a great deal of hype about the various AI capabilities, a lot of doom-mongering about job cuts (and a lot of reasonable warnings about job cuts too) but very little about the fight back against AI systems by attacking them on their own ground using their own weaknesses.

That looks to me awfully like there isn’t enough awareness of how easily they can be defeated by deliberate mischief or activism, and I expect to see some red faces and corporate account damage as a result.

PS

This article appeared yesterday that also talks about the bias I mentioned: https://techcrunch.com/2016/12/10/5-unexpected-sources-of-bias-in-artificial-intelligence/

Since I wrote this blog, I was asked via Linked-In to clarify why I said that Open Source AI systems would have more security risk. Here is my response:

I wasn’t intending to heap fuel on a dying debate (though since current debate looks the same as in early 1990s it is dying slowly). I like and use open source too. I should have explained my reasoning better to facilitate open source checking: In regular (algorithmic) code, programming error rate should be similar so increasing the number of people checking should cancel out the risk from more contributors so there should be no a priori difference between open and closed. However:

In deep learning, obscurity reappears via neural net weightings being less intuitive to humans. That provides a tempting hiding place.

AI foundations are vulnerable to group-think, where team members share similar world models. These prejudices will affect the nature of OS and CS code and result in AI with inherent and subtle judgment biases which will be less easy to spot than bugs and be more visible to people with alternative world models. Those people are more likely to exist in an OS pool than a CS pool and more likely to be opponents so not share their results.

Deep learning may show the equivalent of political (or masculine and feminine). As well as encouraging group-think, that also distorts the distribution of biases and therefore the cancelling out of errors can no longer be assumed.

Human factors in defeating security often work better than exploiting software bugs. Some of the deep learning AI is designed to mimic humans as well as possible in thinking and in interfacing. I suspect that might also make them more vulnerable to meta-human-factor attacks. Again, exposure to different and diverse cultures will show a non-uniform distribution of error/bias spotting/disclosure/exploitation.

Deep learning will become harder for humans to understand as it develops and becomes more machine dependent. That will amplify the above weaknesses. Think of optical illusions that greatly distort human perception and think of similar in advanced AI deep learning. Errors or biases that are discovered will become more valuable to an opponent since they are less likely to be spotted by others, increasing their black market exploitation risk.

I have not been a programmer for over 20 years and am no security expert so my reasoning may be defective, but at least now you know what my reasoning was and can therefore spot errors in it.

Can we automate restaurant reviews?

Reviews are an important part of modern life. People often consult reviews before buying things, visiting a restaurant or booking a hotel. There are even reviews on the best seats to choose on planes. When reviews are honestly given, they can be very useful to potential buyers, but what if they aren’t honestly give? What if they are glowing reviews written by friends of the restaurant owners, or scathing reviews written by friends of the competition? What if the service received was fine, but the reviewer simply didn’t like the race or gender of the person delivering it? Many reviews fall into these categories, but of course we can’t be sure how many, because when someone writes a review, we don’t know whether they were being honest or not, or whether they are biased or not. Adding a category of automated reviews would add credibility provided the technology is independent of the establishment concerned.

Face recognition software is now so good that it can read lips better than human lip reading experts. It can be used to detect emotions too, distinguishing smiles or frowns, and whether someone is nervous, stressed or relaxed. Voice recognition can discern not only words but changes in pitch and volume that might indicate their emotional context. Wearable devices can also detect emotions such as stress.

Given this wealth of technology capability, cameras and microphones in a restaurant could help verify human reviews and provide machine reviews. Using the checking in process it can identify members of a group that might later submit a review, and thus compare their review with video and audio records of the visit to determine whether it seems reasonably true. This could be done by machine using analysis of gestures, chat and facial expressions. If the person giving a poor review looked unhappy with the taste of the food while they were eating it, then it is credible. If their facial expression were of sheer pleasure and the review said it tasted awful, then that review could be marked as not credible, and furthermore, other reviews by that person could be called into question too. In fact, guests would in effect be given automated reviews of their credibility. Over time, a trust rating would accrue, that could be used to group other reviews by credibility rating.

Totally automated reviews could also be produced, by analyzing facial expressions, conversations and gestures across a whole restaurant full of people. These machine reviews would be processed in the cloud by trusted review companies and could give star ratings for restaurants. They could even take into account what dishes people were eating to give ratings for each dish, as well as more general ratings for entire chains.

Service could also be automatically assessed to some degree too. How long were the people there before they were greeted/served/asked for orders/food delivered. The conversation could even be automatically transcribed in many cases, so comments about rudeness or mistakes could be verified.

Obviously there are many circumstances where this would not work, but there are many where it could, so AI might well become an important player in the reviews business. At a time when restaurants are closing due to malicious bad reviews, or ripping people off in spite of poor quality thanks to dishonest positive reviews, then this might help a lot. A future where people are forced to be more honest in their reviews because they know that AI review checking could damage their reputation if they are found to have been dishonest might cause some people to avoid reviewing altogether, but it could improve the reliability of the reviews that still do happen.

Still not perfect, but it could be a lot better than today, where you rarely know how much a review can be trusted.

Guest post: The Future of Management, by new futurist Branimir Trošić

Delighted to host a guest post by a new futurist Branimir Trošić sharing his thoughts on

The Future of Management

Self-management includes concepts like no hierarchical structures (where no one has any coercive power over anyone else) and the concept of accountability which explains that people must keep their commitments to each other (Josh Alan Dykstra, 2014). Many understand that concept, but can not quite understand how this concept could work in practical situations, partly because there is a problem of understanding this concept with a learned mental model: learned assumptions how the organization should be organized: a hierarchical structure where information flows from top to bottom. Not being able to imagine the alternative and the idea of an organization without managers frightens many: who would be in control, who would be responsible for the company’s strategy, who will lead the way? This concept purports that there is one god-like leader that sits on top of the organization and shows the way. And, usually, organizations are currently organized in that way, but the problem of that kind of organization is that not everyone in the organization understands what “The” leader is communicating, nor do people find themselves accountable for the organization to reach the common goal. Natural state of mind of every individual is that he or she will work for their own interest. And interestingly, this is one of the axioms of economy: an organization will flourish only if the individual within the organization can flourish. The problem of a hierarchical organization is exactly in hierarchy: different levels have different goals, meaning that the goal of the CEO (increasing the profits) is not the same as the goal of the worker at the bottom (usually to finish his/hers daily chores, not minding the efficiency of the work and head home). Hierarchical organizations repeatedly fail at motivating different levels to accept shared vision and to act upon it.

If motivating every worker in the organization is the problem of a hierarchical organization, and if exactly hierarchy is the show stopper in implementing that, then the logical solution would be to remove hierarchy from the organization. Solution sounds simple, but another question imposes: how can this be done in real life? If there is no boss to tell you what to do and how to do it, who should be the one to define the direction?  There were many attempt to foster self-management throughout history, and some experiments didn’t work out. Partially because people were not ready for self-management because of  wrong image of self-managing and self-organizing organization – the question of the master manipulator hangs above that idea, and assumptions that emerge from that mental model actually destroy any possibility of creating a self-organizing organization. What helps us understand that concept is to look at other things that are self-organizing, that thrive at self-organization. If we look at manmade systems, we will not find any examples because of artificial surroundings. In his book  “The necessary revolution” Senge claims that seeing systems is the most important concept that helps cultivate an intelligence that we all possess and in that way to cultivate the positive force for systems intelligence to flourish on a larger scale. When people start seeing systems, they begin to understand the basic flaws in prevailing mental models and alternative futures that are possible (Senge, P., 2014). So, if “artificial” is a characteristic of something that is not self-organizing but imposed, then everything that is not artificial should have also the characteristic of self-organization. The answer is in the question: nature is self-organizing and gives us numerous examples how human organizations should be structured. The best example that one can come across when thinking about self-organizing communities is the community of ants. Ants teach us that there is no hierarchy but specialization, and that type of social structure is called eusociality. Eusociality is the ability for the certain group of ants (or insects) to specialize for certain job or work, losing the ability to do anything else, but in cooperation work to reach the mutual goal (rising of offspring, gathering food, etc..)

In those terms, when same principles apply to human society and/or organizations, then we can understand that all the answers are in the nature, because nature is self-organized and self-managed. Nature teaches us that there is really no need for the manager in a sense of having one god-like persona that directs and tells everybody what to do, but a leader who can help individuals develop their abilities and help people find one’s own purpose.  This type of self-organization has numerous implications, both on the organization itself and on the individual.

From the organization perspective: having  fifty without a manager people that work relentlessly on mutual goal is usually more productive than having one thousand people with managers, each one working on their own goals not understanding the mutual goal. This is partly because managers tend to tell people what they cannot do, rather to empower them to do it. Google organized their project teams of three individuals, with project leadership rotating between them. Similarly how ants do it, they put in charge the one whose abilities are appropriate for given situation. Leader is appointed not according to mutual consent by deciding who has the best leader traits, but by looking which ones traits are the best answer to current problem. Furthermore, when people are empowered to take lead according to their abilities, they are put in surroundings in which management still exists, but a different kind of management: the one where behaviors of both leaders and followers are induced, rather than compelled (Hock, D., 2000.).  In such self-organizations, power is never used; at least not the one whose sole purpose is to boost an ego of a manager, but power whose purpose is to solve the problem. By giving up power and coercive control – you get it back and have access to power. The question imposes why managers are not willing to give up their power. The problem is fear, they try to manage things, force them to their will. To do that immense energy is wasted solely on defending themselves. When this control is let go, the manager/leader then frees up huge amounts of energy spent in wrong way (Watts, W.A.1968.). To be able to let go that control, one should trust their subordinates and this main characteristic of a leader: leader has faith in his followers to do the job, and this trust is born out of humility, a feeling that your subordinates are equal to you, the leader. That freed power that is gained through letting go of control, having faith in subordinates and considering them equal is then divided throughout organization, and when power is divided – everybody becomes the leader, vision becomes mutual. In organizations where everybody is equal and does his best to reach the shared vision, productivity rises because workers stop being active and start being productive: problems are communicated and solved in order to reach the mutual goal. At this point, we should stop using the term self-management and start using the term self-organization. At this point the mental model of an old hierarchical organization becomes obsolete, and its alternative: self-organization becomes clearer. In comparison to hierarchical organization, self-organized one is decentralized, or in Clevelend’s terms: uncentralized, it becomes a real network of cooperation between groups of people specialized by their passion and gained power to work and achieve the mutual goal. When a network of passionate and specialized people starts communicating in such a way, a vision becomes a flux and not a rigid non-flexible axiom.  Since it is a flux, and everybody is a leader, everybody is also invited to participate in creation of that flux. When a self-organization reaches that state, it also becomes a dynamic organization, the one that has the freedom to change (or not to change) from day to day, and is as a chaordic organization powered from periphery, not from center. In this way, the vision will be a goal that can be reached, and the one that cannot live up to its plans. This is why hierarchical organizations fail: since there is no possibility for the people to participate in the vision (the god-like creature at the top is the one who communicates the vision), to change it according to its possibilities, since the people are not empowered to become leaders in their own fields, since power is used in coercive way and taken from people, since there is no trust, no faith, and rule of fear, the probability to reach the goals of the vision is rarely high. Or to put it better: the vision is not the one that is communicated, but the one that is known and not communicated, the taboo: to fulfill the wishes and achieve the ideas of workers direct superior, that often (due to lack of specialization) has anything to do with productive fulfillment of the vision. In that way, we should understand that in hierarchical organizations the real customer whom the whole organization is serving is actually – the CEO, which is, to put it in a simple term: wrong.

From the perspective of an individual, we have to recognize that simple acts of minifying subordinates mistakes and empowering them to decide for themselves how they will contribute to a mutual goal actually transforms unsatisfied workers that probably do not sleep at night  and are afraid of what will happen to them because of the hierarchical relationship with their boss  to a highly productive workers that like to talk of different subjects, proactively solve the problems of the company  and are repeatedly praised. This is the model of how leadership should look like. A leader has to understand that the most productive system is a uncentralized system, with every center being specialized for a certain job, every specialization center should take over the lead when an organization faces the problem which can be solved exactly by that specialization center. This type of organization should be backed also financially, and this can be done in two ways: everybody should start with the same pay-check. The work people do should be then categorized in order to define what type of work brings what type of revenue (or any other benefit to the company), and the basic pay should be multiplied with the index of complexity of the productivity (not activity). In that way, people can choose to do a lot of little improvements that will lead towards reaching the same goal or one big innovation that will be the game changer. The difference between the first worker and the lateral is simply in the knowledge. Knowledgeable workers tend to be more productive by applying their knowledge into daily business.  Second way is to build profit centers and gather specialized people around them. Each profit center should be responsible for their own budget they would receive after committing to reach a goal negotiated with other profit centers. The budget would be dynamic, going up or down on every quarterly forecast depending on contribution profit center had to fulfillment of a goal.

Furthermore, from the perspective of an individual, working in chaordic organization has several benefits. First, by pursuing their passion, people are intrinsically motivated to do what they love to do. And this is the holy grail of motivation: how to intrinsically motivate the worker. The answer is simple: let him or her do whatever they want to do, while they pursue the mutual goal. It does not matter how long they stay at work, do they work from nine to five, or even if they are coming to work, while they have their own way of contributing to an organization. Being able to organize one self, and not to feel that the punishment will follow because bosses requirements are not met is the crucial thing in letting the team go (Medinnila, A, 1998.)

In terms of self-organization, management has no future. At least, not what under the word “management” we understand today. Management will become just one of the jobs being done within the company, not putting people who manage businesses above nor below anybody else. The characteristic of the third industrial revolution: decentralization of production and distribution of services will apparently happen also within the organizations. Social structures will be disrupted, since fewer and fewer people are prone to be their own boss, there is not a single reason not to create organizations and companies according to those who make the company: people. And only in the moment when every single employee is a leader within his or hers line of work, when every leader works and collaborates with a goal to reach a mutual goal, then the noun “company” will achieve it’s true meaning. Until then, people will work in slaveries, not companies, being unproductive, unimaginative and unmotivated.

We should doubt that there is any possibility of changing current companies in such a way, but new ones with described structure will arise, become disruptive, more efficient and the same thing will happen that happens with all the companies that refuse to adapt and ride the tsunami of the future: they will go bankrupt.  It is a model in which internet replaced tv and other media, how air b’n’b replaced booking the hotel, Uber the taxi and all other examples how new emerging models had disruptive effect towards old economy of scarcity models.

The disruptive transformation of a company is a transformation of doing business, and also, in a way a transformation of how we live.

Branimir’s contact details:

Branimir Trosic, btrosic23@gmail.com

How to decide green policies

Many people in officialdom seem to love putting ticks in boxes. Apparently once all the boxes are ticked, a task can be put in the ‘mission accomplished’ cupboard and forgotten about. So watching some of the recent political debate in the run-up to our UK election, it occurred to me that there must be groups of people discussing ideas for policies and then having meetings to decide whether they tick the right boxes to be included in a manifesto. I had some amusing time thinking about how a meeting might go for the Green Party. A little preamble first.

I could write about any of the UK parties I guess. Depending on your choice of media nicknames, we have the Nasty Party, the Fruitcake Racist Party, the Pedophile Empathy Party, the Pedophile and Women Molesting Party, the National Suicide Party (though they get their acronym in the wrong order) and a few Invisible Parties. OK, I invented some of those based on recent news stories of assorted facts and allegations and make no assertion of any truth in any of them whatsoever. The Greens are trickier to nickname – ‘The Poverty and Oppression Maximization, Environmental Destruction, Economic Collapse, Anti-science, Anti-fun and General Misery Party’ is a bit of a mouthful. I like having greens around, just so long as they never win control. No matter how stupid a mistake I might ever make, I’ll always know that greens would have made a worse one.

So what would a green policy development meeting might be like? I’ll make the obvious assumption that the policies don’t all come from the Green MP. Like any party, there are local groups of people, presumably mostly green types in the wider sense of the word, who produce ideas to feed up the ladder. Many won’t even belong to any official party, but still think of themselves as green. Some will have an interest mainly in socialism, some more interested in environmentalism, most will be a blend of the two. And to be fair, most of them will be perfectly nice people who want to make the world a better place, just like the rest of us. I’ve met a lot of greens, and we do agree at least on motive even if I think they are wrong on most of their ideas of how to achieve the goals. We all want world peace and justice, a healthy environment and to solve poverty and oppression. The main difference between us is deciding how best to achieve all that.

So I’ll look at green debate generally as a source of the likely discussions, rather than any actual Green Party manifesto, even though that still looks pretty scary. To avoid litigation threats and keep my bank balance intact, I’ll state that this is only a personal imagining of what might go into such green meetings, and you can decide for yourself how much it matches up to the reality. It is possible that the actual Green Party may not actually run this way, and might not support some of the policies I discuss, which are included in this piece based on wider green debate, not the Green Party itself. Legal disclaimers in place, I’ll get on with my imagining:

Perhaps there might be some general discussion over the welcome coffee about how awful it is that some nasty capitalist types make money and there might be economic growth, how terrible it is that scientists keep discovering things and technologists keep developing them, how awful it is that people are allowed to disbelieve in a global warming catastrophe and still be allowed to roam free and how there should be a beautiful world one day where a green elite is in charge, the population has been culled down to a billion or two and everyone left has to do everything they say on pain of imprisonment or death. After coffee, the group migrates to a few nice recycled paper flip-charts to start filling them with brainstormed suggestions. Then they have to tick boxes for each suggestion to filter out the ones not dumb enough to qualify. Then make a nice summary page with the ones that get all the boxes ticked. So what boxes do they need? And I guess I ought to give a few real examples as evidence.

Environmental destruction has to be the first one. Greens must really hate the environment, since the majority of green policies damage it, but they manage to get them implemented via cunning marketing to useful idiots to persuade them that the environment will benefit. The idiots implement them thinking the environment will benefit, but it suffers.  Some quick examples:

Wind turbines are a big favorite of greens, but planted on peat bogs in Scotland, the necessary roads cause the bogs to dry out, emitting vast quantities of CO2 and destroying the peat ecosystem. Scottish wind turbines also kill eagles and other birds.

In the Far East, many bogs have been drained to grow palm oil for biofuels, another green favorite that they’ve managed to squeeze into EU law. Again, vast quantities of CO2, and again ecosystem destruction.

Forests around the world have been cut down to make room for palm oil plantations too, displacing local people, destroying an ecosystem to replace it with one to meet green fuel targets.

Still more forests have been cut down to enable new ones to be planted to cash in on  carbon offset schemes to keep corporate greens happy that they can keep flying to all those green conferences without feeling guilt. More people displaced, more destruction.

Staying with biofuels, a lot of organic waste from agriculture is converted to biofuels instead of ploughing it back into the land. Soil structure therefore deteriorates, damaging ecosystem and damaging future land quality. CO2 savings by making the bio-fuel are offset against locking the carbon up in soil organic matter so there isn’t much benefit even there, but the damage holds.

Solar farms are proliferating in the UK, often occupying prime agricultural land that really ought to be growing food for the many people in the world still suffering from malnutrition. The same solar panels could have been sent to otherwise useless desert areas in a sunny country and used to displace far more fossil fuels and save far more CO2 without reducing food production. Instead, people in many African countries have to use wood stoves favored by greens as sustainable, but which produce airborne particles that greatly reduce health. Black carbon resulting from open wood fires also contributes directly to warming.

Many of the above policy effects don’t just tick the environmental destruction box, but also the next ones poverty and oppression maximization. Increasing poverty resulted directly from increasing food prices as food was grown to be converted into bio-fuel. Bio-fuels as first implemented were a mind-numbingly stupid green policy. Very many of the world’s poorest people have been forcefully pushed out of their lands and into even deeper poverty to make space to grow bio-fuel crops. Many have starved or suffered malnutrition. Entire ecosystems have been destroyed, forests replaced, many animals pushed towards extinction by loss of habitat. More recently, even greens have realized the stupidity and these polices are slowly being fixed.

Other green policies see economic development by poor people as a bad thing because it increases their environmental footprint. The poor are therefore kept poor. Again, their poverty means they can’t use modern efficient technology to cook or keep warm, they have to chop trees to get wood to burn, removing trees damages soil integrity, helps flooding, burning them produces harmful particles and black carbon to increase warming. Furthermore, with too little money to buy proper food, some are forced to hunt or buy bushmeat, endangering animal species and helping to spread viruses between closely genetically-related animals and humans.

So a few more boxes appear. All the above polices achieved pretty much the opposite of what they presumably intended, assuming the people involved didn’t actually want to destroy the world. Maybe a counterproductive box needs to be ticked too.

Counterproductive links well to another of the green’s apparent goals, of economic collapse. They want to stop economic growth. They want to reduce obsolescence.  Obsolescence is the force that drives faster and faster progress towards devices that give us a high quality of life with a far lower environmental impact, with less resource use, lower energy use, and less pollution. If you slow obsolescence down because green dogma says it is a bad thing, all those factors worsen. The economy also suffers. The economy suffers again if energy prices are deliberately made very high by adding assorted green levies such as carbon taxes, or renewable energy subsidies.  Renewable energy subsidies encourage more oppression of people who really don’t want wind turbines nearby, causing them stress and health problems, disrupting breeding cycles of small wild animals in the areas, reducing the value of people’s homes, while making the companies that employ hem less able to compete internationally, so increasing bankruptcy, redundancy and making even more poverty. Meanwhile the rich wind farm owners are given lots of money from poor people who are forced to buy their energy and pay higher taxes for the other half of their subsidy. The poor take all the costs, the rich take all the benefits. That could be another box to tick, since it seems pretty universal in green policy So much for  policies that are meant to be socialist! Green manifesto policies would make some of these problems far worse still. Business would be strongly loaded with extra costs and admin, and the profits they can still manage to make would be confiscated to pay for the ridiculous spending plans. With a few Greens in power, damage will be limited and survivable. If they were to win control, our economy would collapse totally in a rapidly accelerating debt spiral.

Greens hate science and technology, another possible box to tick. I once chatted to one of the Green leaders (I do go to environmental events sometimes if I think I can help steer things in a more logical direction), and was told ‘the last thing we need is more science’. But it is science and technology that makes us able to live in extreme comfort today alongside a healthy environment. 100 years ago, pollution was terrible. Rivers caught fire. People died from breathing in a wide variety of pollutants. Today, we have clean water and clean air. Thanks to increasing CO2 levels – and although CO2 certainly does contribute to warming, though not as much as feared by warmist doom-mongers, it also has many positive effects – there is more global greenery today than decades ago. Plants thrive as CO2 levels increase so they are growing faster and healthier. We can grow more food and forests can recover faster from earlier green destruction.

The greens also apparently have a box that ‘prevents anyone having any fun’. Given their way, we’d be allowed no meat, our homes would all have to be dimly lit and freezing cold, we’d have to walk everywhere or wait for buses in the rain. Those buses would still burn diesel fuel, which kills thousands of people every year via inhalation of tiny particulates. When you get anywhere, you’d have to use ancient technologies that have to be fixed instead of replaced. You’d have to do stuff that doesn’t use much energy or involve eating anything nice, going anywhere nice because that would involve travel and travel is bad, except for greens, who can go to as many international conferences as they want.

So if the greens get their way, if people are dumb enough to fall for promises of infinite milk and honey for all, all paid for by taxing 3 bankers, then the world we’d live in would very quickly have a devastated environment, a devastated economy, a massive transfer of wealth from the poor to a few rich people, enormous oppression, increasing poverty, decreasing health, no fun at all. In short, with all the above boxes checked, the final summary box to get the policy into manifesto must be ‘increases general misery‘.

An interesting list of boxes to tick really. It seems that all truly green policies must:

1. Cause environmental destruction
2. Increase poverty and oppression
3. Be counterproductive
4. Push towards economic collapse
5. Make the poor suffer all the costs while the rich (and Green elite) reap the benefits
6. Impede further science and technology development
7. Prevent anyone having fun
8. Lead to general misery

This can’t be actually how they run their meetings I suppose: unless they get someone from outside with a working brain to tick the boxes, the participants would need to have some basic understanding of the actual likely consequences of their proposals and to be malign, and there is little evidence to suggest any of them do understand, and they are mostly not malign. Greens are mostly actually quite nice people, even the ones in politics, and I do really think they believe in what they are doing. Their hearts are usually in the right place, it’s just that their brains are missing or malfunctioning. All of the boxes get ticked, it’s just unintentionally.

I rest my case.

 

 

 

The IT dark age – The relapse

I long ago used a slide in my talks about the IT dark age, showing how we’d come through a period (early 90s)where engineers were in charge and it worked, into an era where accountants had got hold of it and were misusing it (mid 90s), followed by a terrible period where administrators discovered it and used it in the worst ways possible (late 90s, early 00s). After that dark age, we started to emerge into an age of IT enlightenment, where the dumbest of behaviors had hopefully been filtered out and we were starting to use it correctly and reap the benefits.

Well, we’ve gone into relapse. We have entered a period of uncertain duration where the hard-won wisdom we’d accumulated and handed down has been thrown in the bin by a new generation of engineers, accountants and administrators and some extraordinarily stupid decisions and system designs are once again being made. The new design process is apparently quite straightforward: What task are we trying to solve? How can we achieve this in the least effective, least secure, most time-consuming, most annoying, most customer loyalty destructive way possible? Now, how fast can we implement that? Get to it!

If aliens landed and looked at some of the recent ways we have started to use IT, they’d conclude that this was all a green conspiracy, designed to make everyone so anti-technology that we’d be happy to throw hundreds of years of progress away and go back to the 16th century. Given that they have been so successful in destroying so much of the environment under the banner of protecting it, there is sufficient evidence that greens really haven’t a clue what they are doing, but worse still, gullible political and business leaders will cheerfully do the exact opposite of what they want as long as the right doublespeak is used when they’re sold the policy.

The main Green laboratory in the UK is the previously nice seaside town of Brighton. Being an extreme socialist party, that one might think would be a binperson’s best friend, the Greens in charge nevertheless managed to force their binpeople to go on strike, making what ought to be an environmental paradise into a stinking litter-strewn cesspit for several weeks. They’ve also managed to create near-permanent traffic gridlock supposedly to maximise the amount of air pollution and CO2 they can get from the traffic.

More recently, they have decided to change their parking meters for the very latest IT. No longer do you have to reach into your pocket and push a few coins into a machine and carry a paper ticket all the way back to your car windscreen. Such a tedious process consumed up to a minute of your day. It simply had to be replaced with proper modern technology. There are loads of IT solutions to pick from, but the Greens apparently decided to go for the worst possible implementation, resulting in numerous press reports about how awful it is. IT should not be awful, it can and should be done in ways that are better in almost every way than old-fashioned systems. I rarely drive anyway and go to Brighton very rarely, but I am still annoyed at incompetent or deliberate misuse of IT.

If I were to go there by car, I’d also have to go via the Dartford Crossing, where again, inappropriate IT has been used incompetently to replace a tollbooth system that makes no economic sense in the first place. The government would be better off if it simply paid for it directly. Instead, each person using it is likely to be fined if they don’t know how it operates, and even if they do, they have to spend a lot more expensive time and effort to pay than before. Again, it is a severe abuse of IT, conferring a tiny benefit on a tiny group of people at the expense of significant extra load on very many people.

Another financial example is the migration to self-pay terminals in shops. In Stansted Airport’s W H Smith a couple of days ago, I sat watching a long queue of people taking forever to buy newspapers. Instead of a few seconds handing over a coin and walking out, it was taking a minute or more to read menus, choose which buttons to touch, inspecting papers to find barcodes, fumbling for credit cards, checking some more boxes, checking they hadn’t left their boarding pass or paper behind, and finally leaving. An assistant stood there idle, watching people struggle instead of serving them in a few seconds. I wanted a paper but the long queue was sufficient deterrent and they lost the sale. Who wins in such a situation? The staff who lost their jobs certainly didn’t. I as the customer had no paper to read so I didn’t win. I would be astonished with all the lost sales if W H Smith were better off so they didn’t win. The airport will likely make less from their take too. Even the terminal manufacturing industry only swaps one type of POS terminal for another with marginally different costs. I’m not knocking W H Smith, they are just another of loads of companies doing this now. But it isn’t progress, it is going backwards.

When I arrived at my hotel, another electronic terminal was replacing a check-in assistant with a check-in terminal usage assistant. He was very friendly and helpful, but check-in wasn’t any easier or faster for me, and the terminal design still needed him to be there too because like so many others, it was designed by people who have zero understanding of how other people actually do things.  Just like those ticket machines in rail stations that we all detest.

When I got to my room, the thermostat used a tiny LCD panel, with tiny meaningless symbols, with no backlight, in a dimly lit room, with black text on a dark green background. So even after searching for my reading glasses, since I hadn’t brought a torch with me, I couldn’t see a thing on it so I couldn’t use the air conditioning. An on/off switch and a simple wheel with temperature marked on it used to work perfectly fine. If it ain’t broke, don’t do your very best to totally wreck it.

These are just a few everyday examples, alongside other everyday IT abuses such as minute fonts and frequent use of meaningless icons instead of straightforward text. IT is wonderful. We can make devices with absolutely superb capability for very little cost. We can make lives happier, better, easier, healthier, more prosperous, even more environmentally friendly.

Why then are so many people so intent on using advanced IT to drag us back into another dark age?

 

 

Stimulative technology

You are sick of reading about disruptive technology, well, I am anyway. When a technology changes many areas of life and business dramatically it is often labelled disruptive technology. Disruption was the business strategy buzzword of the last decade. Great news though: the primarily disruptive phase of IT is rapidly being replaced by a more stimulative phase, where it still changes things but in a more creative way. Disruption hasn’t stopped, it’s just not going to be the headline effect. Stimulation will replace it. It isn’t just IT that is changing either, but materials and biotech too.

Stimulative technology creates new areas of business, new industries, new areas of lifestyle. It isn’t new per se. The invention of the wheel is an excellent example. It destroyed a cave industry based on log rolling, and doubtless a few cavemen had to retrain from their carrying or log-rolling careers.

I won’t waffle on for ages here, I don’t need to. The internet of things, digital jewelry, active skin, AI, neural chips, storage and processing that is physically tiny but with huge capacity, dirt cheap displays, lighting, local 3D mapping and location, 3D printing, far-reach inductive powering, virtual and augmented reality, smart drugs and delivery systems, drones, new super-materials such as graphene and molybdenene, spray-on solar … The list carries on and on. These are all developing very, very quickly now, and are all capable of stimulating entire new industries and revolutionizing lifestyle and the way we do business. They will certainly disrupt, but they will stimulate even more. Some jobs will be wiped out, but more will be created. Pretty much everything will be affected hugely, but mostly beneficially and creatively. The economy will grow faster, there will be many beneficial effects across the board, including the arts and social development as well as manufacturing industry, other commerce and politics. Overall, we will live better lives as a result.

So, you read it here first. Stimulative technology is the next disruptive technology.

 

The future of MBAs

I’ve reached M in my ‘the future of’ series. So, MBAs.

We have all had to sit through talks where the speaker thinks that using lots of points that start with the same letter is somehow impressive. During one such talk, I got bored and produced this one letter fully comprehensive MBA. Enjoy:

The future of walled gardens

In the physical world, walled gardens are pretty places we visit, pay an entry fee, then enjoy the attractions therein. It is well understood that people often only value what they have to pay for and walled gardens capitalise on that. While there, we may buy coffees or snacks from the captive facilities at premium prices and we generally accept that premium as normal practice. Charging an entry fee ensures that people are more likely to stay inside for longer, using services (picnic areas, scenery, toilets etc) they have already paid for rather than similar ones outside that may be free and certainly instead of paying another provider as well.

In the content industry, the term applies to bundles of services from a particular supplier or available on a particular platform. There is some financial, psychological, convenience, time or other cost to enter and then to leave. Just as with the real thing, they have a range of attractions within that make people want to enter, and once there, they will often access local service variants rather than pay the penalty to leave and access perhaps better ones elsewhere. Our regulators started taking notice of them in the early days of cable TV, addressed the potential abuses and sometimes took steps to prevent telecoms or cable companies from locking customers in. More recently, operating system and device manufacturers have also fallen under the same inspection.

Commercial enterprises have an interest in keeping customers within their domain so that they can extract the most profit from them. What is less immediately obvious is why customers allow it. If people want to use a particular physical facility, such as an airport, or a particular tourist attraction such as a city, or indeed a walled garden, then they have to put up with the particular selection of shops and restaurants there, and are vulnerable to exploitation such as higher prices because of the lack of local choice. There is a high penalty in time and expense to find an alternative. With device manufacturers, the manufacturer is in an excellent position to force customers to use services from those they have selected, and that enables them to skim charges for transactions, sometimes from both ends. The customer can only avoid that by using multiple devices, which incurs a severe cost penalty. There may be some competition among apps within the same garden, but all are subject to the rules of the garden. Operating systems are also walled gardens, but the OS usually just goes with the choice of device. It may be possible to swap to an alternative, but few users bother; most just accept the one that it comes with.

Walled gardens in the media are common but easier to avoid. With free satellite and terrestrial TV as well as online video and TV services, there is now abundant choice, though each provider still tries to make cute little walled gardens if they can. Customers can’t get access to absolutely all content unless they pay multiple subscriptions, but can minimize outlay by choosing the most appropriate garden for their needs and staying in it.

The web has disappointed though. When it was young, many imagined it would become a perfect market, with suppliers offering services and everyone would see all the offerings, all the prices and make free decisions where to buy and deal direct without having to pay for intermediaries. It has so badly missed the target that Berners Lee and others are now thinking how it can be redesigned to achieve the original goals. Users can theoretically browse freely, but the services they actually want to use often become natural monopolies, and can then expand organically into other territories, becoming walled gardens. The salvation is that new companies can always emerge that provide an alternative. It’s impossible to monopolize cyberspace. Only bits of it can be walled off.

Natural monopolies arise when people have free access to everything but one supplier offers something unique and thus becomes the only significant player. Amazon wasn’t a walled garden when it started so much as a specialist store that grew into a small mall and is now a big cyber-city. Because it is so dominant and facilitates buying from numerous suppliers, it certainly qualifies as a walled garden now, but it is still possible to easily find many other stores. By contrast, Facebook has been a walled garden since its infancy, with a miniature web-like world inside its walls with its own versions of popular services. It can monitor and exploit the residents for as long as it can prevent them leaving. The primary penalties for leaving are momentarily losing contact with friends and losing interface familiarity, but I have never understood why so many people spend so much of their time locked within its walls rather than using the full range of web offerings available to them. The walls seem very low, and the world outside is obviously attractive, so the voluntary confinement is beyond my comprehension.

There will remain be a big incentive for companies to build walled gardens and plenty of scope for making diverse collections of unique content and functions too and plenty of companies wanting to make theirs as attractive as possible and attempt to keep people inside. However, artificial intelligence may well change the way that networked material is found, so the inconvenience wall may vanish, along with the OS and interface familiarity walls. Deliberate barriers and filters may prevent it gaining access to some things, but without deliberate obstruction, many walled gardens may only have one side walled, that of price for unique content. If that is all it has to lock people in, then it may really be no different conceptually from a big store. Supermarkets offer this in the physical world, but many other shops remain.

If companies try to lock in too much content in one place, others will offer competing packages. It would make it easier for competitors and that is a disincentive. If a walled garden becomes too greedy, its suppliers and customers will go elsewhere. The key to managing them is to ensure diversity by ensuring the capability to compete. Diversity keeps them naturally in check.

Network competition may well be key. If users have devices that can make their own nets or access many externally provided ones, the scope for competition is high, and the ease of communicating and dealing directly is also high. It will be easy for producers to sell content direct and avoid middlemen taking a cut. That won’t eliminate walled gardens, because some companies will still do exclusive deals and not want to deal direct. There are many attractive business models available to potential content producers and direct selling is only one. Also, as new streams of content become attractive, they are sometimes bought, and this can be the intended exit strategy for start-ups.

Perhaps that is where we are already at. Lots of content that isn’t in walled gardens exists and much is free. Much is exclusive to walled gardens. It is easy to be influenced by recent acquisitions and market fluctuations, but really, the nature of the market hasn’t really changed, it just adapts to new physical platforms. In the physical world, we are free to roam but walled gardens offer attractive destinations. The same applies to media. Walled gardens won’t go away, but there is also no reason to expect them to take over completely. With new networks, new business models, new entrepreneurs, new content makers, new viewing platforms, the same business diversity will continue. Fluctuating degrees of substitution rather than full elimination will continue to be the norm.

Or maybe I’m having an off-day and just can’t see something important. Who knows?

 

 

More future fashion fun

A nice light hearted shorty again. It started as one on smart makeup, but I deleted that and will do it soon. This one is easier and in line with today’s news.

I am the best dressed and most fashion conscious futurologist in my office. Mind you, the population is 1. I liked an article in the papers this morning about Amazon starting to offer 3D printed bobble-heads that look like you.

See: http://t.co/iFBtEaRfBd.

I am especially pleased since I suggested it over 2 years ago  in a paper I wrote on 3D printing.

More uses for 3d printing

In the news article, you see the chappy with a bobble-head of him wearing the same shirt. It is obvious that since Amazon sells shirts too, that it won’t be long at all before they send you cute little avatars of you wearing the outfits you buy from them. It starts with bobble-heads but all the doll manufacturers will bring out versions based on their dolls, as well as character merchandise from films, games, TV shows. Kids will populate doll houses with minis of them and their friends.

You could even give one of a friend to them for a birthday present instead of a gift voucher, so that they can see the outfit you are offering them before they decide whether they want that or something different. Over time, you’d have a collection of minis of you and your friends in various outfits.

3D cameras are coming to phones too, so you’ll be able to immortalize embarrassing office party antics in 3D office ornaments. When you can’t afford to buy an outfit or accessory sported by your favorite celeb, you could get a miniature wearing it. Clothing manufacturers may well appreciate the extra revenue from selling miniatures of their best kit.

Sports manufacturers will make replicas of you wearing their kit, doing sporting activities. Car manufacturers will have ones of you driving the car they want you to buy, or you could buy a fleet of miniatures. Holiday companies could put you in a resort hotspot. Or in a bedroom ….with your chosen celeb.

OK, enough.

 

 

The future of ‘authenticity’

I recently watched an interesting documentary on the evolution of the British coffee shop market. I then had an idea for a new chain that is so sharp it would scratch your display if I wrote it here, so I’ll keep that secret. The documentary left me with another thought: what’s so special about authentic?

I’ll blog as I think and see where I get to, if anywhere.

Starbucks and Costa sell coffee (for my American readers, Costa is a British version of Starbucks that sells better coffee but seems to agree they should pay tax just like the rest of us – yes I know Starbucks has since reformed a bit, but Costa didn’t have to). Cafe Nero (or is it just Nero?) sells coffee with the ‘Authentic Italian’ experience. I never knew that until I watched the documentary. Such things fly way over my head. If Nero is closest when I want a coffee, I’ll go in, and I know the coffee is nice, just like Costa is nice, but authentic Italian? Why the hell would I care about my coffee being authentic Italian? I don’t go anywhere to get an authentic Danish pastry or an authentic Australian beer, or an authentic Swiss cheese, or an authentic Coke. What has coffee got to do with Italy anyway? It’s a drink. I don’t care how they treat it in any particular country, even if they used to make it nicer there. The basic recipes and techniques for making a decent coffee were spread worldwide decades ago, and it’s the coffee I want. Anyway, we use a Swiss coffee machine with Swiss coffee at home, not Italian, because the Swiss learned from their Italian sub-population and then added their usual high precision materials and engineering and science, they didn’t just take it as gospel that Mama somehow knew best. And because my wife is Swiss. My razor sharp idea isn’t a Swiss coffee chain by the way.

I therefore wonder how many other people who go into Cafe Nero care tuppence whether they are getting an authentic Italian experience, or whether like me they just want a decent coffee and it seems a nice enough place. I can understand the need to get the best atmosphere, ambiance, feel, whatever you want to call it. I can certainly understand that people might want a cake or snack to go with their coffee. I just don’t understand the desire to associate with another country. Italy is fine for a visit; I have nothing against Italians, but neither do I aspire in any way to be or behave Italian.

Let’s think it through a bit. An overall experience is made up of a large number of components: quality and taste of the coffee and snacks, natural or synthetic, healthy or naughty, the staff and the nature of the service, exterior and interior decor and color scheme, mixture of aromas, range of foods, size of cake portion, ages groups and tribal ranges of other customers, comfort of furnishings, lighting levels, wireless LAN access….. There are hundreds of factors. The potential range of combinations  is massive. People can’t handle all that information when they want a coffee, so they need an easy way to decide quickly. ‘Italian’ is really just a brand, reducing the choice stress and Cafe Nero is just adopting a set of typical brand values evolved by an entire nation over centuries. I guess that makes some sense.

But not all that much sense. The Italian bit is a nice shortcut, but once it’s taken out of Italy, whatever it might be, it isn’t in Italy any more. The customers are not expected to order in Italian apart beyond a few silly words to describe the size of the coffee. The customers mostly aren’t Italian, don’t look Italian, don’t chat in Italian and don’t behave Italian. The weather isn’t Italian. The views outside aren’t Italian. The architecture isn’t Italian. So only a few bits of the overall experience can be Italian, the overall experience just isn’t. If only a few bits are authentic, why bother? Why not just extract some insights of what things about ‘Italian’ customers find desirable and then adapt them to the local market? Perhaps what they have done, so if they just drop the pretense, everything would be fine. They can’t honestly say they offer an authentic Italian experience, just a few components of such. I never noticed their supposed Italianness anyway but I hate pretentiousness so now that I understand their offering, it adds up to a slight negative for me. Now that I know they are pretending to be Italian, I will think twice before using them again, but still will if it’s more than a few metres further to another coffee shop. Really, I just want a coffee and possibly a slice of cake, in a reasonably warm and welcoming coffee shop.

Given that it is impossible to provide an ‘authentic Italian experience’ outside of Italy without also simulating every aspect of being in Italy, how authentic could they be in the future? What is the future of authenticity? Could Cafe Nero offer a genuinely Italian experience if that’s what they really wanted? Bring on VR, AR, direct brain links, sensory recording and replay. Total Recall.  Yes they could, sort of. With a full sensory full immersion system, you could deliver an experience that is real and authentic in every sense except that it isn’t real. In 2050, you could sell a seemingly genuinely authentic Italian coffee and cake in a genuinely Italian atmosphere, anywhere. But when they do that, I’ll download that onto my home coffee machine or my digital jewelry. Come to think about it, I could just drink water and eat bread and do all the rest virtually. Full authenticity, zero cost.

This Total Recall style virtual holiday or virtual coffee is fine as far as it goes, but a key problem is knowing that it isn’t real. If you disable that by hypnosis or drugs or surgery or implants or Zombie tech, then your Matrix style world will have some other issues to worry about that are more important. If you don’t, and I’m pretty sure we won’t, then knowing the difference between real and virtual will be all-important. If you know it isn’t real, it pushes a different set of buttons in your brain.

In parallel, as AI gets more and more powerful, a lot of things will be taken over by machines. That adds to the total work pool of man + machine so the economy expands and we’re all better off, if we do it right. We can even restore and improve the environment at the same time. In that world, some roles will still be occupied by humans. People will focus more on human skills, human interaction, crafts, experiences, care, arts and entertainment, sports, and especially offering love and attention. I call it the Care Economy. If you take two absolutely identical items, one provided by a machine and one by another person, the one offered by the person will be more valued, and therefore more valuable – apart from a tiny geek market that specifically wants machines. Don’t believe me? Think of the high price glassware you keep for special occasions and dinner parties. Cut by hand by an expert with years of training. Each glass is slightly different from every other. In one sense it is shoddy workmanship compared to the mass-produced glass, precision made, all identical, that costs 1% as much. The human involvement is absolutely critical. The key human involvement is that you know you couldn’t possibly do it, that it took a highly skilled craftsman. You aren’t buying just the glass, but the skills and attention and dedication and time of the craftsman. In just the same way, you will happily pay a bigger proportion of your bigger future income for other people’s time. Virtual is fine and cheap, but you’ll happily pay far more for the real thing. That will greatly offset the forces pushing towards a totally virtual experience.

This won’t happen overnight, and that brings us to another force that plays out over the same time. When we use a phrase like ‘authentic Italian’, we don’t normally put a date on it. Do we mean contemporary Italy, 1960 Italy, or what? If 1960, then we’d have to use a lot of virtual tech to simulate it. If we mean contemporary, then that includes all the virtual stuff that goes on in Italy too, which is likely pretty much what happens virtually elsewhere. A large proportion of our everyday will be virtual. How can you have authentic virtual? When half of what everyone sees every day isn’t real, you could no more have an authentic Italian coffee bar than an authentic hobbit hole in Middle Earth.

Authenticity is a term that can already only be applied to a subset of properties of a particular component. A food item or a drink could be authentic in terms of its recipe and taste, origin and means of production of the ingredients, perhaps even served by an Italian, but the authenticity of the surrounding context is doomed to be more and more limited. Does it matter though? I don’t think so.

The more I think about it, the less I care if it is in any way authentic. I want a pleasing product served by pleasant human staff in a pleasant atmosphere. I care about the various properties and attributes in an absolute sense, and I also care whether they are provided by human or machine, but the degree to which they mimic some particular tradition really doesn’t add any value for me. I am very happy to set culture free to explore the infinite potential of imagination and make an experience as enjoyable as possible.  Authenticity is just a labelled cage, and we’re better if it is unlocked. I want real pleasure, not pretend pleasure, but authenticity is increasingly becoming a pretense.

Oh, my razor sharp idea? As I said, it’s secret.

 

 

The internet of things will soon be history

I’ve been a full time futurologist since 1991, and an engineer working on far future R&D stuff since I left uni in 1981. It is great seeing a lot of the 1980s dreams about connecting everything together finally starting to become real, although as I’ve blogged a bit recently, some of the grander claims we’re seeing for future home automation are rather unlikely. Yes you can, but you probably won’t, though some people will certainly adopt some stuff. Now that most people are starting to get the idea that you can connect things and add intelligence to them, we’re seeing a lot of overshoot too on the importance of the internet of things, which is the generalised form of the same thing.

It’s my job as a futurologist not only to understand that trend (and I’ve been yacking about putting chips in everything for decades) but then to look past it to see what is coming next. Or if it is here to stay, then that would also be an important conclusion too, but you know what, it just isn’t. The internet of things will be about as long lived as most other generations of technology, such as the mobile phone. Do you still have one? I don’t, well I do but they are all in a box in the garage somewhere. I have a general purpose mobile computer that happens to do be a phone as well as dozens of other things. So do you probably. The only reason you might still call it a smartphone or an iPhone is because it has to be called something and nobody in the IT marketing industry has any imagination. PDA was a rubbish name and that was the choice.

You can stick chips in everything, and you can connect them all together via the net. But that capability will disappear quickly into the background and the IT zeitgeist will move on. It really won’t be very long before a lot of the things we interact with are virtual, imaginary. To all intents and purposes they will be there, and will do wonderful things, but they won’t physically exist. So they won’t have chips in them. You can’t put a chip into a figment of imagination, even though you can make it appear in front of your eyes and interact with it. A good topical example of this is the smart watch, all set to make an imminent grand entrance. Smart watches are struggling to solve battery problems, they’ll be expensive too. They don’t need batteries if they are just images and a fully interactive image of a hugely sophisticated smart watch could also be made free, as one of a million things done by a free app. The smart watch’s demise is already inevitable. The energy it takes to produce an image on the retina is a great deal less than the energy needed to power a smart watch on your wrist and the cost of a few seconds of your time to explain to an AI how you’d like your wrist to be accessorised is a few seconds of your time, rather fewer seconds than you’d have spent on choosing something that costs a lot. In fact, the energy needed for direct retinal projection and associated comms is far less than can be harvested easily from your body or the environment, so there is no battery problem to solve.

If you can do that with a smart watch, making it just an imaginary item, you can do it to any kind of IT interface. You only need to see the interface, the rest can be put anywhere, on your belt, in your bag or in the IT ether that will evolve from today’s cloud. My pad, smartphone, TV and watch can all be recycled.

I can also do loads of things with imagination that I can’t do for real. I can have an imaginary wand. I can point it at you and turn you into a frog. Then in my eyes, the images of you change to those of a frog. Sure, it’s not real, you aren’t really a frog, but you are to me. I can wave it again and make the building walls vanish, so I can see the stuff on sale inside. A few of those images could be very real and come from cameras all over the place, the chips-in-everything stuff, but actually, I don’t have much interest in most of what the shop actually has, I am not interested in most of the local physical reality of a shop; what I am far more interested in is what I can buy, and I’ll be shown those things, in ways that appeal to me, whether they’re physically there or on Amazon Virtual. So 1% is chips-in-everything, 99% is imaginary, virtual, some sort of visual manifestation of my profile, Amazon Virtual’s AI systems, how my own AI knows I like to see things, and a fair bit of other people’s imagination to design the virtual decor, the nice presentation options, the virtual fauna and flora making it more fun, and countless other intermediaries and extramediaries, or whatever you call all those others that add value and fun to an experience without actually getting in the way. All just images directly projected onto my retinas. Not so much chips-in-everything as no chips at all except a few sensors, comms and an infinitesimal timeshare of a processor and storage somewhere.

A lot of people dismiss augmented reality as irrelevant passing fad. They say video visors and active contact lenses won’t catch on because of privacy concerns (and I’d agree that is a big issue that needs to be discussed and sorted, but it will be discussed and sorted). But when you realise that what we’re going to get isn’t just an internet of things, but a total convergence of physical and virtual, a coming together of real and imaginary, an explosion of human creativity,  a new renaissance, a realisation of yours and everyone else’s wildest dreams as part of your everyday reality; when you realise that, then the internet of things suddenly starts to look more than just a little bit boring, part of the old days when we actually had to make stuff and you had to have the same as everyone else and it all cost a fortune and needed charged up all the time.

The internet of things is only starting to arrive. But it won’t stay for long before it hides in the cupboard and disappears from memory. A far, far more exciting future is coming up close behind. The world of creativity and imagination. Bring it on!

Drone Delivery: Technical feasibility does not guarantee market success

One of my first ever futurology articles explained why Digital Compact Cassette wouldn’t succeed in the marketplace and I was proved right. It should have been obvious from the outset that it wouldn’t fly well, but it was still designed, manufactured and shipped to a few customers.

Decades on, I had a good laugh yesterday reading about the Amazon drone delivery service. Yes, you can buy drones; yes, they can carry packages, and yes, you can make them gently place a package on someone’s doorstep. No, it won’t work in the marketplace. I was asked by the BBC Radio 4 to explain on air, but the BBC is far more worried about audio quality than content quality and I could only do the interview from home, so they decided not to use me after all (not entirely fair – I didn’t check who they actually used and it might have been someone far better).

Anyway, here’s what I would have said:

The benefits are obvious. Many of the dangers are also obvious, and Amazon isn’t a company I normally associate with stupidity, so they can’t really be planning to go all the way. Therefore, this must be a simple PR stunt, and the media shouldn’t be such easy prey for free advertising.

Very many packages are delivered to homes and offices every day. If even a small percentage were drone-delivered, the skies will be full of drones. Amazon would only control some of them. There would be mid-air collisions between drones, between drones and kites and balloons, with new wind turbines, model aeroplanes and helicopters, even with real emergency helicopters. Drones with spinning blades would be dropping out of the sky frequently, injuring people, damaging houses and gardens, onto roads, causing accidents. People would die.

Drones are not silent. A lot of drones would make a lot of extra ambient noise in an environment where noise pollution is already too high. They are also visible, creating another nuisance visual disturbance.

Kids are mischievous. Some adults are mischievous, some criminal, some nosey, some terrorists. I can’t help wonder what the life expectancy of a drone would be if it is delivering to a housing estate full of kids like the one I was. If I was still a kid, I’d be donning a mask (don’t want Amazon giving my photo to the police) and catching them, making nets to bring them down and stringing wires between buildings on their normal routes, throwing stones at them, shooting them with bows and arrows, Nerf guns, water pistols, flying other toy drones into their paths. I’d be tying all sorts of other things onto them for their ongoing journey. I’d be having a lot of fun on the black market with all the intercepted goods too.

If I were a terrorist, and if drones were becoming common delivery tools, I’d buy some and put Amazon labels on them, or if I’m short of cash, I’d hijack a few, pay kids pocket money to capture them, and after suitable mods, start using them to deliver very nasty packages precisely onto doorsteps or spray lethal concoctions into the air above specific locations.

If I were just criminal, I’d make use of the abundance of drones to make my own less conspicuous, so that I could case homes for burglaries, spy on businesses with cameras and intercept their wireless signals, check that an area is free of police, or get interesting videos for my voyeur websites. Maybe I’d add a blinding laser into them to attack any police coming into the scene of my crime, giving valuable extra time without giving my location away.

There are also social implications: jobs in Amazon, delivery and logistics companies would trade against drone manufacturing and management. Neighbours might fall out if a house frequently gets noisy deliveries from a drone while people are entering and leaving an adjacent door or relaxing in the garden, or their kids are playing innocently in the front garden as a drone lands very close by. Drone delivery would be especially problematic when doorways are close together, as they often are in cities.

Drones are good fun as toys and for hobbies, in low numbers. They are also useful for some utility and emergency service tasks, under supervision. They are really not a good solution for home delivery, even if technically it can be done. Amazon knows that as well as I do, and this whole thing can only be a publicity stunt. And if it is, well, I don’t mind, I had a lot of fun with it anyway.

Death by accountant

Some people are not very good at their jobs. Accountants are one of the critical roles in a successful company. If they are good, the company can flourish. If they are bad, it can die. I have come to the conclusion that the worst employee a company can have is an accountant who thinks they are clever but is actually an idiot. If they work with an equivalent self-regarding idiot from marketing, they can destroy a company. Again, many marketing people are essential and very talented, but some just aren’t.

Permit me one rant as a good example:

My dishwasher just broke, again. It is Hotpoint. I wasted a fortune and six hours of my time to get one of their engineers out to fix it, under guarantee, then another to repair the damage he’d done by doing it wrong. Total repair time was 3.5 weeks because they don’t have enough engineers. They cost money apparently. The 6 hours was because an accountant had decided that they should use fewer staff in the call centre to save costs, and even though their customers probably earn more than a call centre staff member, that would be their money, not Hotpoint’s. It’s OK to waste customer’s money and time, even if they never want to buy from you again as a result. And I won’t!

I would normally have trashed the dishwasher, but the girl in the call centre assured me that this model should last for several years after the repair, and they’d give me a 3 month extended guarantee. So I did. Big mistake. Now, 3.5 months later, it has broken again, £110 for 3.5 months dishwasher, not good value at all. This time I decided to fix it myself, but I’d watched a TV program about people who had dishwashers repaired by independent engineers and they wouldn’t work because they weren’t allowed the codes to reset the machine. An accountant had worked out that that blocking independent fair-priced repairs would guarantee high-priced work for their own engineers. However, this is a broken hinge, so might not be part of the control system. I found the broken part, a far-too-thin for the job bolt, which had sheared due to normal everyday forces on it. The thin bolt is cheaper than a strong one, saving several pounds a year for Hotpoint, and designed to last past the initial parts and labour guarantee. After that, the few pence for the bolt is covered by the 5 years by the parts guarantee, but changing it is a £110 call-out fee. Savings are minimal, the potential extra high value work for already overloaded engineers is actually minimal, but the cost of no more sales of white goods ever again to that customer is large. The outcome is a small short term gain, followed eventually by death as customers blacklist them one by one.

This kind of accountancy decision happens everywhere. Identifying tiny savings here and there presumably wins a little praise from a line manager, perhaps an extra bonus for the staff that thought it up, but who  checks the cost of losing the customer by thoroughly annoying them? That usually isn’t one of the beans that gets counted.

Comet went bust a while back. I remember going there. They had a price guarantee on all their products, so why would anyone need to go anywhere else? Well, an accountant and a marketer decided they could offer a price guarantee to fool all their dumb customers by adding a different letter at the end of each product code, so that they could claim that it wasn’t actually the same product, so the comparison didn’t count. So all their customers stopped buying from them. Death by accountant.

A few of our local restaurants suffered presumed death by accountant too. They were doing very well, filling the place, with lots of happy customers. One day, they look at the books and an accountant explained that if they sold lower quality food, or smaller portions, then profit per meal would be higher. But they presumably didn’t take into account the effect on sales volume of selling lower quality food or reducing portions. Customers stop coming and buying, so they went bust. Death by accountant again.

One or two well-known supermarket chains frequently tried for far too long to fool their customers with fake half price offers and selling large packs at higher price per kilo than small ones. Then it seemed to catch them by surprise that people were going elsewhere. Their accountants and marketers presumably think that customers don’t ever realise the tricks and don’t mind having their intelligence insulted and their time wasted calculating value every time they visit. Their accountants and marketers are actually by far the most valuable employees to their competitors, who see their market share increasing rapidly at their expense.

Telecoms companies, TV companies and many others who sell contract based services take confusion marketing and trick contracts to extremes, with relative novelties such as putting everything possible on their sites except links to let you end a contract, which they make as difficult and time consuming and error ridden as possible. Tricking customers by auto-renewing and making sure that the auto-renew engages a month before a contract expires, and not letting the customer know near that time is tantamount to fraud, but is apparently legal. As long as they mention it in the small print once during the entire life of the contract they can avoid punishment. Obviously their customers don’t check every service they have every week and enter diary reminders to check years ahead on everything they buy, so this is very deliberate trickery. It might make a short-term win, but once a customer is fooled once, they are very likely to avoid doing business with that company again. It may take time, but those customer migrations will eventually be death by accountant too.

Automatically increasing insurance and hoping customers won’t check also trades short term wins against long term survival. The problem seems to affect many industry sectors. This suicide-by-accountant trend seems to be an epidemic at the moment. It must surely end soon, because customers are proving that they are willing eventually to migrate their custom to companies that treat them better. Those accountants that are praising their own cleverness today are actually accumulating a huge volume of angry customers who will happily leave them to die when the market inevitably provides such a sensible competitor.

Customers aren’t stupid. You can treat them as fools for a while, but eventually they will resent it. Then you’ll lose far more than you ever gained.

The bright potential future for BT

I left BT in 2007 after 22 years. (For my US readers, BT is Britain’s version of AT&T). Like most employees of most companies, I had a few gripes over the years, but overall, BT was a good company to work for – humane to its staff, while trying to do a good job for both shareholders and customers in a difficult political climate, with pretty sound ethics. It wasn’t perfect, but what company is?

I currently have BT broadband problems, as you do, again, but I still like BT and still keep all my shares, hoping one day they might get back up to what I paid for them. BT holds a unique place in my investments, being the only one I have ever lost money on (well, if I actually sold my shares now I’d lose). But it is a good company, and entirely fixable. My perhaps unjustifiably high regard for the company in spite of any evidence to the contrary doesn’t extend to the board. BT has a lot of excellent and devoted staff, and they are the reason for its survival, I would say very much in spite of it a long history of rubbish CEOs, including Livingstone. (I would exclude Vallance from my rubbish CEO list, I thought he actually did a pretty good job in the circumstances he faced.) As an engineer who could see the vast potential profits from relatively small investments that were open to a decent sized IT company, they all seemed incompetent to me, determined to ignore those potential markets and investing stupidly in others but focusing mainly on cost cutting as the only tool they could really understand. I don’t think any BT CEO since 1985 has deserved their grade or pay. BT gives its staff appraisals, and if I was his boss, I’d have given Livingstone 3 out of 10. At least now he’s in government, he will just be one incompetent among many so he will blend in just fine.

I won’t bother with the details of mistakes made. They are history. The future could still be bright if the new CEO is any good. Sadly, I don’t know Patterson. He joined the board after I left and I had no contact with him beforehand so I know nothing about him. I wish him the very best of success, for everyone’s sakes and if he does well, I’ll very happily sing his praises.

(I know it’s easy to say I could have done a far better job than most BT CEOs. I am certain that I could, and I certainly wouldn’t have made most of the huge errors that I saw, but anyone could say that and of course it is unprovable , and in any case,  I knew lots of other employees that would still have done much better than me. I guess it is a bit like US presidents. With 300 million people to pick from, you really have to wonder how the hell some of them ever got elected.)

So, what should BT do now? I declare my financial interests. I have a few shares, and one day if I am still alive they’ll give me a pension, and I remain a customer, so I do really want them to flourish, but otherwise I have had no financial exchanges with BT since I left in 2007.

A lot of the potential for BT has existed for a long time, and it is proof of previous CEO incompetence that it remains mostly untapped. Other areas are quite new.

There are a few valuable assets that BT makes too little use of to date. One is trust. BT has always achieved a very high trust rating from customers. Sure, they might whine about occasional lousy customer service or call centre delays, but mostly they still trust BT. Technically, customers assume their kit will work pretty reliably and they will eventually fix it with only modest annoyance when it fails. That’s better than it sounds compared to a lot of companies (Hotpoint, British Gas and O2 to name three at the very top of my most recent customer service hate list). They also trust BT on security, again an advantage not to be sniffed at. More importantly, customers trust it morally. It is quite a nice company. It pays its taxes. It has good old fashioned values and doesn’t do services that are morally questionable except where required to by law. It leans towards the customer’s side on questions of privacy v state surveillance. Again, a whole lot better on several important topical points than many big IT and web companies right now. A decent CEO would make his marketing departments do wonders with those advantages.

BT’s main physical asset is a very widespread network, much of which is fibre. But is has seriously floundered on decent speed broadband roll-out for badly miscalculated economic reasons and has ended up losing large numbers of customers onto mobile and other broadband providers. Firstly, it has to fix that by greatly accelerating its roll-out of fibre to cover the entire population within towns and suburbs. Further than that, it can plead poverty to government to extract subsidies for uneconomic roll-outs in some country areas, and fob others off with custom solutions. How close the fibre actually gets to the end customer is not important and there are many feasible architectural solutions. The data rate the customer gets is important.

The data rates it needs to provide via that fibre must be at least 50Mbit/s, which I calculated a long time ago is the latent demand of an average household today. It must be ready to increase those basic rates quickly through 100Mbit/s in 2015 into Gbits/s soon after.

It should by default provide high speed wireless from all of those homes into the nearby area. This will allow serious competition with mobile companies, especially since many customers carry tablets with only wireless LAN access. Those tablets and many smartphones rely on cloud provision for many services such as photo, video and music storage, as well as download services such as TV on demand. Decent wireless rates in the vicinity of most homes and business properties would make fairly ubiquitous broadband a reality, with none of the tiny date rate limits and poor connections offered by mobile operators. (As an aside, not doing that ages ago instead of crippling the company with the costs of unnecessary 3G licenses was one of the big errors I mentioned).

With high speed ubiquitous access, and still loads of building space to place storage and servers, BT could be a first class cloud provider (as Bonfield should have understood, coming from a computing company in the days when the cloud was still called distributed computing and computing on demand). Its engineers have understood cloud technology principles since the 80s, but it has never really invested in it properly. Now that other companies are threatening to put in their own access to their own clouds, BT is vulnerable to attack if it doesn’t quickly seize the opportunity by the throat. This may well become another missed opportunity for BT.

Another one (that CEO Heiffer should have understood, coming as he did from the finance world) is banking. BT manages to charge profitably on calls that cost just a few pence. Micro-payments is resurfacing once again as a valuable service. So far, no company has succeeded in delivering an acceptable micro-payments service but BT has the geographic coverage and technical skill to pull it off. It could go further and do proper full-service community banking. Again, a huge advantage has fallen into its lap thanks to the demise of trust in conventional banks. If any company could make community based banking work, BT could. The political climate is very favourable to get appropriate regulatory consent, society is ready and even eager, and the technology is available and proven with which to make it. Trust is the magic extra ingredient that BT has more of than other players.

Cloud financing, buying and other community based enterprises are all up-and-coming now, drawing from social and business versions of cloud thinking. Again, the core ideas go back decades. BT has been involved in their debates since over 20 years ago and holds a good hand of cards. It still could help a great deal to stimulate economic redevelopment of the UK by implementing just some of its ideas in this space. It is ironic that Livinsgtone failed to understand this enormous opportunity while he was CEO of BT, yet has now been made Minister of State for Trade and Investment. Why would anyone think he will suddenly understand now?

BT could also develop some of its many inventions made at its research labs. In many cases, small development costs are all that should be needed to generate large incomes. BT’s policy for ages has been to starve any forward looking R&D and only feed proven markets. That is no way to grow. Serious R&D investment could reap many times over in rewards. AI, convergence of IT with biotech, sponge nets, augmented reality, novel interfaces, 3D comms, digital bubbles, biomimetics and many others offer potential. Even the railways are open to attack. Conventional rail is still only equivalent to BT’s old circuit-switched lines that it used until the 1970s. A company that has been in front runners for 40 years of packet switching developments ought to be able to apply equivalent thinking to rail and road to gain rich rewards, converging time-wise as it does now with self driving cars, electrics, self organisation, high speed wireless, super-capacitor development and a host of other technologies BT understands well. Here again, rich pickings are available, and BT has one of the best positions to capitalise.

I could go on, but that is enough examples for now. BT has been offered a fresh start with a fresh CEO. If he is even a bit brave he could easily achieve things very far beyond any of his predecessors. As I said, I don’t know him so have no idea if he will be good or bad. Let’s hope he is up to the job and not just another huge disappointment.

Phoenix-based business strategy will win in a fast-changing world

I am leaving for a conference in a few minutes, so this one will be brief. I hate working in airports and hotels.

Businesses worry how they will survive the next 5, 10, 15 years. They should perhaps stop worrying. The primary purpose of a business is to make money. So here is a better strategy than worrying and spending loads on long term planning:

Spot opportunity

Use cloud based thinking and virtuality to get business up and running explosively quickly.

Employ as few staff as possible as full employees, buy the rest in on short term consultancy contracts and freelancing. That keeps admin overheads minimal. Make them use their own kit and use cloud for IT support and provision. That makes IT staff, risks and costs minimal.

Develop quickly and make your money fast with no regard to longevity.

When competition or other market erosion forces start making an impact, cash in and close down while value is still good

Re-invest in next idea, rising like a phoenix using the cash from the last business

This approach is very light-weight. It needs far less administrative load and can be far more task focused, with higher profit margins.

Live fast, die young, resurrect.

OK, flight to catch.

 

The rise and fall of the web

This is my part of a joint newsletter with Rohit Talwar, his was published just now as a guest blog.

The rise and fall of the web

20 years ago, the web was in its infancy and the first conferences appeared where we could all discuss what was coming next. Even then the need was obvious for search engines, portal sites, firewalls, social networking, online shopping, auctions, discount buying schemes and so on and even the seedier side of the web was already obvious back then. Not much around today on the web wasn’t being discussed 20 years ago. It just took that long to emerge and evolve into what was anticipated. What has happened is exposure of the naïve optimism of some of the early debate.

Over the coming years we saw the expected creation of companies like Amazon and ebay, Facebook, Twitter and Google, and the rise of already existing companies such as Microsoft, Apple and Samsung, in some cases from niche player to market dominance. Without exception, the companies I mentioned deserve praise for struggling through the difficult phases of market creation and the sometimes huge and prolonged losses leading up to break-even and eventual profitability. They all started with a dream and made it happen, knowing they would succeed if they worked hard enough at it.

Without wanting to remove any of that praise, it is hard not to wonder if at least part of the dream is starting to turn sour. Is there evidence now that power corrupts? Does possession of a strong market position always lead inevitably to market abuse?

In each case, there are recent examples of less-than-saintly behaviour, but some issues are spreading as a problem, so rather than pick on individual companies, I’ll focus on the issues. In each case, a large company with little effective competition is in strong position to force these policies since they know customers and clients can’t easily just walk away. There is no cartel, but if a problem happens to affect all the main providers for a service, or it is a de-facto monopoly, you really have no choice.

Privacy invasion or at least scant regard for privacy is the biggest issue for some, introducing policies that make it hard for users to remain private. In this case, the reason is obvious. Privacy conflicts with extracting maximum market value from a customer’s personal data. I don’t personally want everyone to know what I just bought online, what I watch on TV, what games I play or what music I am listening to, or to have full access to everything I ever typed on a social networking page. The choice we seem to be presented with is simple. If you don’t want to be fully exposed 24-7, either don’t use the web or a mobile app, or be prepared to spend time frequently to check every site you use carefully for their latest policy changes to make sure an oversight doesn’t allow your privacy doesn’t fall through a new hole they just dug. But even that may not be the real choice now. The emerging pattern seem to be that changes may be introduced retrospectively, eradicating any value in privacy commitments in existing policy. If that behaviour spreads, then any privacy you think you have today is merely an illusion.

Burning the candle at both ends is another recent issue. Although the web has few of the costs associated the with high street, large web companies are charging high fees now to companies to sell via their site, much the same as property developers with the best locations can charge high fees to shops. That end of the candle is well alight, but customers are finding the discounts offered are often far less now too. Now that they have been psychologically hooked by the web empires, prices are rising.

Walled gardens were a consideration for regulators when mobile and broadband networks were emerging – I took part in several workshops discussing their merits and drawbacks. Telecoms regulators understood well that dominant telecoms companies might try to force customers to use only services within their own areas of control, i.e. to stay in their walled garden, and they legislated accordingly to protect customers. It was presumed that competition would suffer greatly if people were not free to wander as they pleased and exploitation would follow soon after.  However, although some of the web giants are heading rapidly and determinedly down exactly that path, the authorities are either looking the other direction or unable to do anything about it. It seems that any regulators that do exist have too vague boundaries on their remits, or the companies fall outside their jurisdiction geographically, or they simply have too many issues to deal with and can’t keep up. It is unacceptable that we now by default have arrived at a business platform that lends itself to abuse but isn’t being properly controlled by the normal regulator processes that apply as standard elsewhere.

Arrogance is a term we hear thrown at web giants frequently now, and it does seem appropriate when a large company ignores protests by its customers and imposes policies that significantly affect the terms and conditions that applied when they first became a customer. Even incrementally small changes can add up to large change in a short time, but if customers have invested time and effort building a profile or establishing a place or network on a site, the personal costs of migration can be too high. There ought to be equivalent rights protecting the interests of customers online just as in the physical world, but online providers appear to be able to make their own conditions of use with much greater scope for abuses, knowing that very few customers will read many pages of small print. Especially where websites feature heavily in everyday use, and where not being a user might even may be a career or social impediment, there should be more protection from arrogance and unilateral determination and management of user rights. Some regulatory body should be making sure terms and conditions are fair and balanced because the market isn’t doing that by itself.

Another aspect of arrogance is the enthusiasm to avoid taxes by exploiting holes in the law, and reading between the lines, it is as if the companies think they know best how money should be spent for humankind’s best interests, not governments. They may be right about government, but that doesn’t excuse arrogance.

Reintermediation is a direct consequence of walled gardens but is an issue in its own right. Early analysis of the web suggested it would lead to perfect markets, where people would be in direct contact with suppliers, thereby cutting out the middle man and his costs while forcing perfect information and hence maximum competitiveness. With good search, it would be easy to find all potential suppliers for something and compare them directly, and there would be no need to go via an agency. What we have now is interesting in that the search sites have themselves become intermediaries, and comparison sites another layer of that, listing results from a subset of suppliers. So instead of removing an intermediary we generated two new ones, three if you use an app store to do it. Everyone wants a slice of the pie of course, but the web was meant to bypass that, and it simply hasn’t. People can go direct, but it doesn’t take long to discover that using a search engine will often put hundreds of pages of the wrong sites before the one you search for. Most of the listings on the first several pages will often be intermediary sites.

In spite of all this, the potential of the web hasn’t gone away. It still allows word of new sites to spread rapidly, for reputations to be made and lost, for empires to spring up overnight, and for old ones to crash and burn. Boredom is under-rated as a motivation to change too. Social network sites in particular are highly vulnerable to their customers simply getting bored and leaving, but new designs and novel ideas can present a real threat to any of them. The sword of Damocles hangs over all.

For all their size and momentum, none of the web giants is guaranteed longevity. As some of yesterday’s giants discovered, a startup can replace them in just a few years. Maybe the first generation of web giants has climbed high, but decadence and abuse of power have made them ripe for conquest. All we need now is to wait for the imminent emergence of the second generation.

Technology Convergence – What’s your Plan? Guest post by Rohit Talwar

Rohit is CEO of Fastfuture and a long-standing friend as well as an excellent futurist. He and I used to do a joint newsletter, and we have started again. Rohit sends it out to his mailing list as a proper newletter and because I don’t use mailing lists, I guest post it here. I’ll post my bit immediately after this one. I’m especially impressed since his bit ticks almost as many filing category boxes as it uses words.

Here is Rohit’s piece:

Technology Convergence – What’s your Plan?

I have just returned from South Korea where I was delivering a keynote speech to a cross-industry forum on how to prepare for and benefit from the opportunities arising from industry convergence. South Korea has made a major strategic commitment starting with government and running through the economy to be a leader in exploiting the potential opportunities arising from the convergence of industries made possible by advances in a range of disciplines. These include information and communications technology, biological and genetic sciences, energy and environmental sciences, cognitive science, materials science and nanotechnology.  From environmental monitoring, smart cars, and intelligent grids through to adaptive bioengineered materials and clothing-embedded wearable sensor device that monitor our health on a continuous basis – the potential is vast.

What struck me about the situation in Korea was how the opportunity is being viewed as a central component of the long-term future of Korea’s economy and how this is manifested in practice. Alongside a national plan, a government sponsored association has been established to drive and facilitate cross-industry collaboration to achieve convergence. In addition to various government-led support initiatives, a range of conferences are being created to help every major sector of the economy understand, explore, act on and realise the potential arising out of convergence.

I am fortunate to get the opportunity to visit 20-25 countries a year across all six continents and get to study and see a lot of what is happening to create tomorrow’s economy. Whilst my perspective is by no means complete, I am not aware of any country where such a systematic and rigorous approach is being taken to driving industry convergence. Those who study Korea know that this approach is nothing new for them – long term research and strategic planning are acknowledged to have played a major role in the evolution of its knowledge economy and rise of Korea and its technology brands on the global stage. Coming from the UK, where it seems that long term thinking and national policy are now long lost relatives, I wonder why it is that so few countries are willing to or capable of taking such a strategic approach.

Rohit on the Road

In the next few months Rohit will delivering speeches in Oslo, Paris, Vilnius, Warsaw, Frankfurt, Helsinki, Denver, Las Vegas, Oman, Leeds and London. Topics to be covered include human enhancement, the future of professional services, the future of HR, transformational forces in business, global drivers of change, how smart businesses create the future, the future technology timeline, the future of travel and tourism, the future of airlines and airports and the future of education. If you would like to arrange a meeting with Rohit in one of these cities or are interested in arranging a presentation or workshop for your organisation, please contact rohit@fastfuture.com

Culture tax and sustainable capitalism

I have written several times now about changing capitalism and democracy to make them suited to the 21st century. Regardless of party politics, most people want a future where nobody is too poor to live a dignified and comfortable life. To ensuring that that is possible, we need to tweak a few things.

I suggested a long time ago that there could be a basic income for all, without any means testing on it, so that everyone has an income at a level they can live on. No means testing means little admin. Then wages go on top, so that everyone is encouraged to work, and then all income from all sources is totalled and taxed appropriately. It is a nice idea. I wasn’t the first to recommend it and many others are saying much the same. The idea is old, but the figures are rarely discussed. It is harder than it sounds and being a nice idea doesn’t ensure  economic feasibility.

The difference between figures between parties would be relatively minor so let’s ignore party politics. In today’s money, it would be great if everyone could have, say, £30k a year as a state benefit, then earn whatever they can on top. 30k doesn’t make you rich, but you can live OK on it so nobody would be poor in any proper sense of the word. With everyone economically provided for and able to lead comfortable and dignified lives, it would be a utopia compared to today. Sadly, it doesn’t add up yet. 65,000,000 x 30,000 = 1,950Bn . The UK economy isn’t that big. The state only gets to control part of GDP and out of that reduced budget it also has its other costs of providing health, education, defence etc, so the amount that could be dished out to everyone on this basis is therefore a lot smaller than 30k. Even if the state takes 75% of GDP and spends most of it on the base allowance, 10k per person would be pushing it. So a family could afford a modest lifestyle, but single people would really struggle. Some people would need additional help, and that reduces the pool left to pay the basic allowance still further. Also, if the state takes 75% of GDP, only 25% is left for everything else, so salaries would be flat, reducing the incentive to work, while investment and entrepreneurial activity are starved of both resources and incentive.

Simple maths thus forces us to make compromises. Sharing resources reduces costs considerably. In a first revision, families might be given less for kids than for the adults, but what about groups of young adults sharing a big house? They may be adults but they also benefit from the same economy of shared resources. So maybe there should be a household limit, or a bedroom tax, or forms and means testing, and it mustn’t incentivise people living separately or house supply suffers. Anyway, it is already getting complicated and our original nice idea is in the bin. That’s why it is such a mess at the moment. There just isn’t enough money to make everyone comfortable without doing lots of allowances and testing and admin. We all want utopia, but we can’t afford it. Even the modest 30k-per-person utopia costs at least 3 times more than we can afford.

However, if we can get back to an average 2.5% growth per year in real terms, and surely we can, it would only take 45 years to get there. That isn’t such a long time. We have hope that if we can get some better government than we have had of late, and are prepared to live with a little economic tweaking, we could achieve good quality of life for all in the second half of the century.

So I really like the idea of a simple welfare system, providing a generous base level allowance to everyone, topped up by rewards of effort, but we will have to wait before we can afford to put that base level at anything like comfortable standards.

Meanwhile, we need to tweak some other things to have any chance of getting there. I’ve commented often that pure capitalism would eventually lead to a machine-based economy, with the machine owners having more and more of the cash, and everyone else getting poorer, so the system will fail. Communism fails too.

On the other hand, capitalism works fine when rewards are shared more equally, it fails when wealth concentration is too high or when incentive is too low. Preserving the incentive to work and create is a mainly matter of setting tax levels well. Making sure that wealth doesn’t get concentrated too much needs a new kind of tax.

The solution I suggest is a culture tax. Culture in the widest meaning.

When someone creates and builds a company, they don’t do so from a state of nothing. They currently take for granted all the accumulated knowledge and culture, trained workforce, access to infrastructure, machines, governance, administrative systems, markets, distribution systems and so on. They add just another tiny brick to what is already a huge and highly elaborate structure. They may invest heavily in their time and money but actually when  considered overall as part of the system their company inhabits, they only pay for a fraction of the things their company will use.

That accumulated knowledge, culture and infrastructure belongs to everyone, not just those who choose to use it. Businesses might consider that this is what they pay taxes for already, but that isn’t explicit in the current system.

The big businesses that are currently avoiding paying UK taxes by paying overseas companies for intellectual property rights could be seen as trailblazing this approach. If they can understand and even justify the idea of paying another part of their company for IP or a franchise, why not pay the host country for IP for access to their entire culture?

This kind of tax would provide the means needed to avoid too much concentration of wealth. A future  businessman might choose to use only software and machines instead of a human workforce to save costs, but levying taxes on use of  the cultural base that makes that possible allows a direct link between use of advanced technology and taxation. Sure, he might add a little extra insight or new knowledge, but would still have to pay the rest of society for access to its share of the cultural base, inherited from the previous generations, on which his company is based. The more he automates, the more sophisticated his use of the system, the more he cuts a human workforce out of his empire, the higher his taxation.

Linking to technology use makes sense. Future AI and robots could do a lot of work currently done by humans. A very small number of people could own almost all of the productive economy. But they would be getting far more than their share of the cultural base, which must belong equally to everyone. In a village where one farmer owns all the sheep, other villagers would be right to ask for rent for their share of the commons if he wants to graze them there.

I feel confident that this extra tax would solve many of the problems associated with automation. We all equally own the country, its culture, laws, language, human knowledge (apart from current patents, trademarks etc. of course), its public infrastructure, not just businessmen. Everyone surely should have the right to be paid if someone else uses part of their share.

The extra culture tax would not magically make the economy bigger. It would just ensure that it is more equally shared out. It is a useful tool to be used by future governments to make it possible to keep capitalism sustainable, preventing its collapse, preserving incentive while fairly distributing reward. Without such a tax, capitalism simply may not survive.

Water companies to deliver Gbit broadband over wet string

Warning: to avoid wasting your time, and since it is no longer April 1st, be aware that this was published as an April Fool joke. Please enjoy it but don’t take it seriously:

Optical fibre is sometimes laid in conventional cable form just like copper wires, but because the actual fibres are so light, they can be coated with a rough surfacing that lets them be blown through plastic ducts using compressed air (the plastic ducts are under 1cm diameter). The fibre wiggles its way to the far end, carried by the air flow. It is simply called ‘blown fibre’ and is used extensively where ducts can easily be laid.

The water industry obviously has huge experience in making smooth channels for water to flow through to every building in the land. Blown fibre technology can adapt to this. Several years ago, advised by future technology consultants Futurizon, research produced a soft furry coating that makes it easy to flush coated fibres down water pipes. The coating is based on sugar and has the consistency of candyfloss. The clever breakthrough was making it so that it lasts until installation is complete and then dissolves harmlessly away in less than an hour.  It is of course safe to drink the tap water even soon after installation.  The remaining problem was how to route the fibres when they come to a junction. The inspiration came from optically guided missiles, which have steerable nose cones, that allow the missile to be routed in the required direction just by rotating the cone. Adding a tiny reusable nose cone capsule to the head to the fibre, and knowing the architecture of the pipework, the fibre can be routed correctly at each junction.

A global consortium of water companies now plans to install nationwide fibre networks via the water supply via a company called Fallopior. The main offices and roll-outs will be in the UK, New Zealand, Australia, and the USA, all of which face issues of getting access to ultrafast broadband for rural areas and all of which have the carbon subsidy economics to make it work. The name of Fallopior presumably emerged because the system uses tubes for delivery and perhaps to try to tap into the female broadband market. At the home, a broadband ‘tap’ is installed that allows the fibre to emerge. Once the fibre is delivered and connected, it is pushed through a silicone plug that is pushed into the tap to completely seal it.

The fibre is routed all the way to the home by this means, and then the broadband tap is opened. A few litres of water later, and the fibre is delivered. It is far more environmentally friendly way of installing the fibre than digging up pavements and roads. The carbon savings and the selling of the associated credits are calculated to reduce the cost of installation to almost zero. This even works in remote areas since the carbon savings are of course far higher here too. The costs of the fibre are low enough to be absorbed into even a low rental agreement. Fallopior say that they can will offer 1Gb/s to any home even in the remotest parts of the country for as little as £5 per month, and this is easily enough to deliver all the high definition TV and internet a home.

Broadband providers have struggled with the economics of fibre to the home and many homes still have to suffer slow broadband, even though they pay far more than this, especially in the country. But all homes have a water supply, so this technology is perfectly adapted. Since the roll-out plans of the other UK providers are so sluggish, the water companies expect to seize massive market share almost overnight.

Some homes questioned about the potential service insisted they don’t want ultra-high speed broadband with the temptations it brings, and amazingly would prefer to have a slower service, even if it means they have to pay more to get less. Engineers have solved this one too. The coating allows very smooth thin nylon string to be coated temporarily and flushed down the pipes in the same way instead of fibre. Since the water keeps it lubricated, wear would be very low and it will only need replaced every 5 years. But that re-installation increases the cost to £7.50 per month.

Now to every nerd’s dream – just like two cans with string between them, this wet string will transmit high audio signals, 100KHz. With the phenomenal ability of today’s coding and compression schemes, this allows 3Mbit/s to be delivered, comparable with what many people receive today on their low speed broadband. Those questioned said they would be happier with this limit which lets them do basic internet access but not much else. It still competes extremely well on price with offerings from other providers so again Fallopior expect massive demand. In an emergency, when there is no electricity supply, a home-owner can still signal the emergency services by making a short series of tugs on the string. Simple Morse code SOS can easily be sent this way. 

A string plant in Cornwall has secretly been built in preparation and has stockpiled  over 100 million km of string. Others have been established on similar basis in the other consortium countries. As another carbon-subsidised activity, the UK site is attached to a 3MW wind turbine. This one looks a little unusual since the spinning motion of the blades is used directly via gears rather like a traditional windmill) to spin the string and power the machinery. String output therefore varies according to wind strength, hence the need to stockpile supplies. Nevertheless, the result is string that is entirely paid for via carbon subsidies. Location in remote Cornwall was chosen because of high winds and proximity to seaside resorts with easy access to local expertise from candyfloss experts. The late arrival of spring and hence the candyfloss market has meant that many were available and willing to assist on the project.

In spite of all the many benefits and promises of very low cost ultra-fast broadband, there is just one problem – as hinted by the unusual just-after-midnight timing of the press release by the Fallopior’s HQ in Auckland, New Zealand, and of course the company’s name.

Out of town centres are the most viable future for physical shops

So the government’s ‘retail guru’ Mary Portas has said that some high streets are doomed and should be turned over to other uses. I don’t share the government’s high regard for her but I do agree that it is time to reconsider the structure and location of retailing.

As usual, I’ll highlight the problem first, then suggest the solution.

I live on the edge of Ipswich. The area is a nice place to live but I rarely go into town. To be absolutely honest, I try hard NOT to go into town. I am sure they don’t want me there anyway, since they try hard to deter me from going in.

In the last year, I’ve been to radio studio three times, the cinema once (that involved over 20 mins looking for a car parking space nearby, eventually parking much further away and walking), and shopping once, dragged kicking and screaming, having to wade through a lake in a waiting-for-brown-field-development car park on our side of town that we used to avoid the trauma of traffic congestion. The planners were presented with a once-in-a-generation opportunity to fix a lot of the congestion when they started redevelopment of the docks, but instead actually worsened the traffic routing and created even more congestion.  I don’t know why they did that, but they did. You could say that Ipswich had been a one-horse town, but the planners shot the horse. Ipswich could have been a great deal better with just a bit of thought. Having said that, there are far worse places, far worse. I’m probably just a troglodyte that owns a shaver.

Like many other towns, a lot of the shops are closing. The issues are familiar all over the country. Congestion, lack of parking and high parking fees compete with easy home delivery from online purchases. Congestion is not the same as throughput, and even though it seems busy, town centre businesses obviously aren’t getting enough business or they wouldn’t be closing. 

I’ve written on the future of high street retailing before:

The future of high street survival: the 6S guide

Future high street retailing

Online shopping offers formidable competition, and in those previous blogs I looked at what can be done to compete . This time, I want to concentrate on the location of shops.

Sometimes I just want to get out of the house and go shopping. If I don’t have anything particularly in mind, I go to Woodbridge and Felixstowe, mainly because they are just as fast to get to as Ipswich, but prettier, it is far easier to park there, and parking doesn’t cost a fortune. If the trip is purely functional, I will often end up at a retail park. They are easy to get to, I can park close to the shop I want, and it is free.

There has been huge resistance to out of town shopping centres over the last decade or two because they obviously take customers away from town centres, and involve driving so were considered environmentally unfriendly. Let’s look at both of those in the light of the new reality.

Big retail parks are mostly full of enormous warehouse stores that offer a purely functional destination. Some are selling stuff that is best suited to online purchasing and the less competitive ones are likely to die or shrink. As they free up the big warehouses, these could be attractively redesigned to house many shops that once lived in town centres. So when someone goes to their local retail park to look at furniture or DIY kit, they might well spend an extra while wandering through some interesting small shops.  The big stores would act as a functional magnet, and the small shops would add interest and serendipity, making a boring functional trip into an enjoyable experience that could fund a flourishing retail community. Provided the rents and rates are OK, and that parking is free and abundant, this could work well as a model for high street condensation and relocation. It could even rejuvenate physical retailing, especially small businesses.

As for environmental impact, being stuck in a traffic jam is far more polluting than driving along unimpeded. Out of town centres can be placed to work well with the local human geography and roads so that traffic can flow smoothly and make less pollution. Parking must be adequate to cope with latent demand or that will drive potential customers onto the net, or force them to drive round and round car parks looking for places, polluting as they go. People who live in town centres generally have ready access to public transport and it is just as easy to aim routes at out of town centres as it is to town centres. If the old high streets are re-purposed, then retail business would just be moved to more viable locations where they could flourish.

If we move shopping out of town, almost everyone benefits. People living out of town would not have to go into town to shop, and congestion there would probably fall so that it would be less traumatic when they do have to go in for other reasons. People living in towns would still have public transport access to shops, just in different locations. The few who live within easy walking distance of town shopping centres would suffer having to go further to shops, but they will suffer their loss anyway if they don’t move.

For people out of town, well designed out-of-town shopping centres offer the potential of reinvention and to rekindle the joy of shopping. For townies, the alternative to shops that are a bit further away might be to have no shops at all. That’s probably the new reality and we either embrace it or suffer it. Government and planners should recognise that and make policy accordingly.

 

UK Brain Drain

For some years I have covered in my talks the possibility of the UK ending up as a retirement home, as high taxes and intergenerational conflicts of interest couple with the forces of remigration and professional mobility. The newspapers this morning say that of the 3.6 million to leave the UK in the last 10 years, two million were between 25 and 44 and one million were professional/managerial. Only 125,000 pensioners left. While this is hardly a major catastrophe, it is still worrying, but then again, it confirms my theory so at least I get to say I told you so.

On one hand, emigration is consistent with a healthy system. We want our kids to be sought after and to be free to move and prosper in a globalised world. On the other hand, those who are leaving are the ones we need to keep to pay for those that won’t leave. If this pattern continues, the ratio of old people to those paying taxes to look after them will increase still further, making care costs even less manageable than they already are. And it is a vicious circle – more will want to leave as it gets worse.

If emigrants were balanced skill for skill against immigrants, there would not be a problem. We certainly will need immigration to balance the outflow, but to solve the problem it needs to be the right immigrants with the right skills. Some immigrants won’t contribute sufficiently to pay for their extra load, others will contribute well in excess of their loading, so we need to get as many of those as we can. To attract them and deter others is not easy. Every country wants the best people to come to help pay their bills.

Low taxes, light regulation and freedom would be much more likely to attract and keep good people than high taxes, high levels of poor regulation and an obsessive surveillance and control culture. It would be better to change in that direction before it’s too late.

The future of music and video media

With the death of HMV and Blockbuster this week, I’ve done some radio interviews on the future of the high street and one on the future of media. I wrote about retailing yesterday so today I’ll pick up on media. I wrote a while back that Spotify isn’t the future of music, not in its current form anyway, though I will admit that streaming is part of the future. Spotify will probably up its game and survive. If it doesn’t, it won’t. (I didn’t properly answer the question then of what the future would actually be. I will now.)

CDs aren’t the future of music either. DVDs or Blu-rays aren’t the future of video. Think about it. If you were starting from scratch today, would you base media distribution on plastic discs that have to be spun quickly in a mechanical device, and need to be read by lasers, are easily damaged, and take up lots of storage space? Of course you wouldn’t. You’d almost certainly go for either solid state or web storage. I’d go for solid state. Here’s why.

Web storage is fine as long as you have a good connection all the time and don’t have to pay for data downloads. I think we will still have streaming services in the far future and they might even remain a large market, but streaming isn’t a perfect solution. Transmitting data requires energy, and transmitting lots of data streams to lots of customers requires big server farms. It also clogs up bandwidth and that is limited too.

Downloading to local storage is also fine to a point. It is a large market now, and will remain so for some time. But there are also big problems with it. Licenses are not the same for downloaded music. You have a much more restricted ownership of music you buy online. The companies’ desire to protect their revenue is a higher priority for them that giving their customers full rights, just as it is with streaming (another reason streaming is not what it could be). With physical media, even though you may have ripped (and hence stolen) the content of the disc before you transferred it, the disc itself stops being yours if you pass it on to someone else. The concept of ownership and theft is very clear with physical media. With an MP3, less so. It is clear that the extra actual cost to the music provider is zero if you give a copy of an MP3 away, and you won’t buy a replacement anyway, and they probably wouldn’t either, so there is no clear revenue loss, so you can easily reason away any guilt in keeping a copy. So the music companies put in stuff like copy protection and non-transferable licenses that make it harder to keep your music organised, use it on multiple devices, recover it after disk crashes or sell it on when you’re bored with it. And with an MP3, you don’t have a nice box to look at and know that you own it. The music companies are more conspicuously stingy with MP3s too. If you are downloading the music, why don’t you get the music videos thrown in too? It’s obvious with the CD, there isn’t space on the disc, so you don’t mind, and the tradition has never been there anyway. A DVD could contain the video, but would cost more. With online music, you can usually watch it on YouTube so why don’t you get a proper decent resolution copy when you actually pay for it?

Anyway, solid state storage. I don’t want to be stuck with CDs or DVDs, and would much prefer to get a USB memory stick with the media on. I could plug it straight into my home cinema systems and watch a full Dolby Digital 7.1 Hi-def music video, preferably in 3D. I could easily play or transfer the files to any device I want. But that’s just today. Already, flexible displays and flexible batteries are appearing in electronics shows. It won’t be long at all before they are extremely common.

This is a demo flexible battery/display from Samsung. This is far more suited to carrying around and everyday abuse than glass. This could be a general purpose display but is also perfectly suited to be an all-round CD/DVD replacement, eventually. It will cost too much initially to directly replace CDs or DVDs or downloads, but the price of such devices is governed by Moore’s Law and will tumble. It could show you the music video or movie, it could hold the music or video, it could communicate with any of your display and audio devices as well as being one itself. It is collectable, and could hold a permanent album cover image or slideshow of video clips or stills. It could be of any shape and size and still do the job. It ticks all the boxes for ownership, portability, robustness, media future-proofing. The battery could be built in or it could be powered inductively, or using solar.

It could support a range of business models too. You could buy albums, one per device, just like CDs, proudly keeping them on a nice rack or display shelf. Resell them at car boot sales or give them to friends. Or you could subscribe to a band or a music producer, and it could hold all of their stuff, and be immediately updated with any of their new releases. It could be locked to just their stuff and just you if that’s what you bought.  The device could support lots of different kinds of license. Or you could buy stuff online and it would download to one you have as a replacement for today’s MP3 player. So it could hold one track, an album, a group, an entire collection, or be the front end device of a streaming service. Devices like this could support many business models. It meets the requirements of the music industry and the customer, doesn’t need lots of energy for cloud based storage, improves the potential quality of offering for everyone. This is the future of music media and probably video.

Of course you can do some of this with an app on a pad too. But having a dedicated device solves a lot of the problems we are used to that are associated with doing that.

Starbucks isn’t wrong to avoid tax, the law is wrong. A universal payment tax would fix it.

Tax avoidance is in the news a lot at the moment. Maybe that is partly because tax as it is now is seen to be unfair and unjust so people feel less bad about trying to avoid it.  In response, the idiots in charge of our taxing seem to think they should ask people and companies to pay taxes voluntarily.

Companies usually exist to make money, and it would be bad management to voluntarily pay more tax anywhere than is required by law. The world offers a wide range of tax regimes and of course a multinational corporation will do its best to exploit the different rates. But governments are meant to be in charge of law, that’s what they are for. It is their job to ensure that the law is fair and that everyone has to pay their share of taxes. But they aren’t doing that at all well. Governments are at fault, not companies or individuals that choose to pay the (creatively) legal minimum. The tax net may be full of holes, and companies are walking through them, but it is government that designed, made and maintains the net. 

Companies such as Starbucks can legally avoid paying UK tax by paying fees for licenses, use of the brand name and other intellectual property to overseas companies in low tax areas. The value and price of intellectual property can be set at pretty much any arbitrary level, and it can be moved around the world instantly so it is an especially useful tool for tax avoidance schemes. We have been in the information economy for decades now, and it is a reflection of competence and extreme sluggishness of the tax authorities that tax law hasn’t kept up. Starbucks have paid their due taxes, there is just a huge mismatch between what is due and what should be due in a competent tax regime.

It isn’t an impossible task to tax properly. There are lots of ways of taxing things so that all companies pay a fair contribution. The situation now is simply ridiculous and government should pick a mechanism and implement it quickly.

The most obvious perhaps is that the government could regulate that all companies must pay tax on the same proportion of their global profits as the proportion of their revenue that is earned in the UK. And that must include web sales and downloads, and most importantly, any intellectual property such as licenses. If Starbucks buys licenses to operate in their particular way, the license sellers would pay the appropriate taxes on the corresponding proportion of their global profits too.

Of course, that would get complicated if overseas suppliers could simply refuse to pay or even to surrender data on their accounts. But that can be solved by allowing accountants to offset purchases only from licensed companies. The responsibility to either pay the tax themselves, or buy from someone also paying tax here would then stay with Starbucks.

Another way of ensuring companies pay proper tax would be to demand payments based on an industry average cost pattern. This would be subject to arguments and would be more complex so would be more expensive to administer.

A third way is using a purchase tax in place of corporation tax. Every company would pay the purchase tax on everything they buy. If it appears as a cost on the UK balance sheet, purchase tax must be paid on it. What a company does overseas should be of no concern of the UK authorities, but if they want to put a UK operating license from a subsidiary or partner on their UK accounts, tax must be paid on it. If this tax is set at the right level so that the total government tax take stays the same overall, the economy should benefit through simplicity and administrative cost reduction.

It is possible to have different tax levels for different kinds of purchase, exceptions, special cases and so on, but each paragraph of extra regulation is another than can be interpreted and used by creative accountants and lawyers.

One of the implications of having a simple purchase tax is that there is a huge incentive to simplify the value chain into as few links as possible. If money is taxed each time it leaves a company, then having fewer company boundaries in the value chain would be cheaper. Keeping as much of the value chain in house as possible would reduce this, but there would be strong pressure to allow reclaiming of purchase taxes across boundaries in the value chain. Of course, that is getting quite close to what VAT is, and we are all familiar with that already. Companies collect VAT on their sales and claim back VAT on purchases. It therefore doesn’t discriminate against companies on the basis of value chain design. It just collects tax on the difference in value between the raw materials and finished products.

So, why not abolish corporation tax entirely and switch to a refined version of VAT, at a higher rate if need be? Why indeed. This refined VAT would be payable on all purchases, from anywhere, but we could modify it so it could still be reclaimed by businesses for purchase from other UK VAT paying suppliers. The important thing is notionally to seal the borders so that all purchases in the UK are taxed. I am not personally in favour of making this refined VAT reclaimable, I think that draws an unjustifiable distinction between companies and individuals that can then be exploited by company owners and is the source of much tax evasion even today. I think facilitating virtual companies and optimising end to end value chain design is the best approach.

Extending this approach, why not also replace income tax and national insurance by a sort of VAT on salary? That would amount to a flat tax, but people who get paid more would pay more tax too, and that in itself is already an improvement to today. If this VAT also was applied to payment of dividends, capital gains, bank interest, inheritance and all other forms of payments, then the person on the ordinary payroll would pay the same rate as the owner of the company, someone selling their shares, the shareholders, inheritors, everyone. What’s not to like? Rich people pay more, poor people pay less. Everything is simple, all loopholes removed. All outgoings from companies taxed at the same level, and all forms of income ditto. A single page of tax law to replace 18000 pages. People living off shore wouldn’t escape any more because their UK-sourced income is taxed at its UK point of payment. Their income from other countries is the affair of those other countries. Just like usually happens today, the money is taxed when coming into the company as a sale, and once when paid out to someone as wages or dividends. But twice would be a huge improvement on the hundreds of times money is taxed today via all the hidden taxes. This revised system would be far simpler and more transparent and if it is kept simple and transparent, with no added loopholes, people would see its fairness. The more secure net means that everyone would pay less tax except those who had previously been avoiding it.

A wannabe tax-avoiding ‘consultant’ might arrange to work for free in the UK, with no UK payments to be taxed, paid instead by an offshore company into an off-shore account, but to avoid tax, that money would need to have come from an overseas operation. If it came from UK profits, it would have been taxed when the money came into the company, and again when it was paid out to the overseas one. People paid by overseas companies out of overseas money are not the UK’s affair. As far as the UK is concerned, they are working for free.

Smarter people than I have calculated that we’d need to set the rate to take about 20% of each transaction. Just a bit more than VAT already is then (VAT adds 20% on so takes 20/120ths=16.67%). So, if that is right, and we seal all the holes and charge it on everything, we can all look forward to a country with no other taxes except a slightly refined form of VAT, that is paid on everything.

So it wouldn’t matter how you got your money. 20% would be paid when you are given it and on any interest the banks pay you on the remaining 80% from saving it. When you spend it, another 20% is gone, leaving 64% of actual value. This compares favourably with today where hundreds of taxes hide away unobserved. They should all go.

I am greatly in favour of the simplicity this offers, but it isn’t without problems. What about selling shares, or houses? If you have to pay 20% on the full cost every time you buy a new house that would greatly penalise people who move often. It also cripples the stock market if people pay 20% each time they swap shares. People would demand exceptions, but each time exceptions are created, new opportunities to avoid tax arise, that can be exploited by clever accountants. So any exceptions would have to be few and well designed with tax avoidance avoidance in mind.

The future of women in work

Women v men: the glass ceiling is full of holes

Most people I think would agree that at least in the West. the glass ceiling stopping women getting to the top maybe hasn’t vanished but has at least huge gaping holes in it. Most big companies and organisations have anti-discrimination policies, and many go as far as having have quotas and other forms of positive discrimination. There are still some where women get a second class deal, but not many now. So assuming that the war is almost won on that front, what does the future hold for women in work? Well, mixed news I think, some good and some bad.

Winner and loser industries

Technology tends not to have all its impact in one lump, rather working over decades to accomplish its full impacts. Such it is with Artificial intelligence and robotics. Lots of manufacturing shop floor jobs have already been gradually replaced by robotics, with more impact to come, and many analytical and professional tasks will gradually be displaced by AI, with many others outsourced. Traditionally male-dominated jobs are being hardest hit and will continue to be, while gender neutral or female-dominated jobs such as policing, social work, sales and marketing, teaching, nursing etc will hardly be affected. Many of the men made redundant will be able to readjust and re-skill, but many will find it hard to do so, with consequent social strains.

Just as power tools have reduced the economic advantage of being physically strong, so future AI will reduce the economic advantage of being smart. What is left is dominated by essentially emotional skills, and although the polarisation certainly isn’t complete here by any means, this is traditionally an area where women dominate.

Looking at this over the whole spectrum, this pic shows some example areas likely to suffer v those that will flourish. Obviously I can’t list every bit of the entire economy.The consequences of AI are mainly influenced by the fact that few jobs are 100% information processing or intellect. Some is usually interpersonal interaction. Administrators will find that the pen-pushing and decision parts of their jobs will decline, and they will spend more of their time on the human side, the emotional side. Professionals will find that they spend more time with clients dealing with the relationship. Managers will spend more time on motivation, leadership and nurturing. Interpersonal skills, emotional skills, empathy, sympathy, caring, leadership, motivation – these are the primary skills human will provide in the AI world. The information economy will decline and gradually be replaced by the ‘care economy’. Although men can and do offer some of the skills in this list, it is clear that many are more associated with women, so the clear conclusion is that women will acquire an increasing dominance in the workplace.

Global v local

However, another consequence of the same forces is that globalisation of work will start to reverse in some fields, because if high quality human contact is essential part of the job, it is harder to do it from a distance. Some jobs require actual physical contact and can’t be done except by someone next to the customer. Looking at a diverse basket of forces, this is how it works out:Another trend in favour of women is that with increasing restructuring or businesses around small cooperatives of complementarily skilled people, networking is an increasingly important skill.

Low pay will still be an issue

Although women will generally have an easier time than men if emotional skills dominate, the evidence today is that most such work is not highly paid, so even though women will have less difficulty in finding work, it will not be high paid work. High end interpersonal skills such as senior management will fare better, but with extensive industry restructuring, there may be less need for senior managers.

Polarisation of pay

In spite of these trend that affect the vast majority of people, star performers aren’t affected in the same way. Although the markets are already depressing wage levels for groups where there is a lot of supply available, the elite are being rewarded more and more highly, and this trend will continue. The hard facts of life are that a very few individuals make a real difference to the success or failure of a company. The superstar designer, scientist, market analyst, manager or negotiator can make a company win. Letting them go to the competition is business suicide, so they justify and demand high remuneration. Sadly, 99%of us are outside the top 1%. Think about it. There are 70 million people in the global top 1%. Even spread across every sector, and ignoring those too young or old to work, that is stiff competition.

Market gender neutrality

Especially on a large scale, the marketplace is essentially gender neutral in the sense that customers generally don’t care whether a business is run by men or women (it certainly isn’t neutral in the mix of male and female customers for particular products and services of course). The market cares about marketing, price, quality, availability and location and a few other things. Gender has little impact. Companies can’t survive on the gender make-up of their staff, only results really count in the market.

Turbulence in the market caused by rapidly changing technology, especially IT, accelerates levelling of the playing field by favouring new business models and adaptable companies and wiping out those that can’t or won’t adapt. By contributing to accelerating change, IT thus acts in accelerating the downfall of a patriarchal business environment in favour of one based purely on merit. It expedites the end of the war of women v men but when it runs to completion, women will play against men and against each other on a truly level playing field.

Women v women: attractive v plain, young v old

Now that the glass ceiling is less of an issue, the battleground is moving on to appearance discrimination, which obviously links to age too. We now often hear older or plainer women complaining that the best jobs are going to pretty young things instead of the more experienced women who sadly have left their prettier days behind, especially in high profile media and customer facing jobs.

A real world example illustrates the problem well. A while back, the BBC’s treatment of older women was ruled discriminatory by the courts because they had favoured attractive younger women to put in front of cameras over older, less attractive ones. However fair it might be, such a ruling puts the customer in conflict with the regulator. Although such a ruling may appear fair, actually all the female presenters lose, as viewers will simply swap channels to programmes hosted by presenters they want to watch. The trouble is that regulators can rule how companies must behave internally, but they can’t prevent customers from using their free choice what to buy. If some viewers prefer to watch attractive young news readers, they can and will. Those programmes hosted by less attractive ones will see a reduction in viewer numbers, and consequential drop in revenue from advertising on those programmes, or in the BBC’s case, just a drop in viewers. Unless the customer has no choice in what they watch, the courts can’t level the playing field.

It isn’t just on TV that such discrimination occurs, but throughout industry. In male dominated areas, with mostly men at the top, attractive women will be favoured at interview time, and will then tend to dominate senior posts, so that quotas can be filled but men get to choose which women fill them. In airlines, it is hard not to notice if you fly frequently, that the most attractive stewardesses end up in first and business class, with the less attractive and older ones serving the economy cabin. And on a front reception desk, bar, sales jobs, and PR, attractive women have an obvious advantage too.

It looks as if this issue is likely to dominate as we move into an economy where women as a whole have the advantage over men. And it will be much harder to legislate equality in this case.

Experience v looks & IQ

With the pension crisis growing daily, it is inevitable that people will have to work longer than today. Social skills tend to grow with age and experience in contrast with intellectual speed and agility and physical beauty, which tend to decline with age. This is a fortunate trend as it enables work to be done by older people at just the time that retirement age will have to increase.

Flat lenses – oozing potential

Lenses used to be curved. Not in the future thanks to Harvard scientists: https://www.seas.harvard.edu/news-events/press-releases/flat-lens-offers-perfect-image and http://pubs.acs.org/doi/abs/10.1021/nl302516v.

Ht http://nextbigfuture.com/ for making me aware.

Flat antennas aren’t new per se, phased array radio antennas have been around decades, but this is the first optical flat lens I am aware of. Theirs is pretty damned clever!

They are already looking at applications such as flat microscope objectives, and have probably covered most of the biggest opportunities. But just in case, and researchers do occasionally miss some opportunities, here are a few for free:

Kite telescopes

NASA are currently flying a 747-based telescope, chucking out huge quantities of water vapour into the high atmosphere, contributing to global warming to take over from their space shuttles. Ironic that such a warmist organisation should do that, but there we go. A large flat surface telescope could presumably be made into a high altitude kite, albeit one that needs a little engineering. And it wouldn’t add to stratospheric water vapour, or even add CO2.

High altitude telescopes could be used for ground imaging as well as space of course, and there would be many commercially viable businesses from this root, as well as military surveillance of course.

Smart glasses and contact lenses

I would like a pair of glasses that record everything I look at. Flat surface cameras would allow this. Glasses are much bigger than my pupil, so they could allow much higher resolution, so I’d be able to see at very high magnification without having to use binoculars. I’d also be able to see infrared, microwaves, see where the strongest cellphone signal is, enable a whole new kind of fashion using different spectra, add to augmented reality hugely by using the infrared channel to show real as well as digital auras. Wow, can’t wait for these! I am playing Assassin’s Creed again, and this is Eagle Sense and then some.

Of course, active contact lenses could also use this tech and offer intuitive optional zoom. I would see the world as normal, but by trying to focus on something in the distance, it would zoom in automatically. There have only been a few updates to my original active contact lens idea from 1991, http://www.futurizon.com/inventions/activecontactlensmay91.pdf but this will be another generation for its 21st anniversary.

Credit card cameras

The smartphone is causing the decline of standalone digital cameras. Digital jewellery will cause the decline of smartphones, but one of the things we still needed them for is the camera. Not any more. A simple credit card camera would work fine. Or maybe even a wristband could be used. Flat cameras will hasten the decline of smartphones.

Smart posters

If they can be printed cheaply, cameras could be built into much of the urban environment. Any poster could have video capture and storage built in, powered by solar, with some comms added too. What and who it sees could direct what it displays. Sure, you can do all that and then some with augmented reality, but augmented reality is a whole load of additional functionality that lives happily alongside other stuff, and doesn’t necessarily replace everything. Posters could be the next wave of Big Brother or the next wave of advertising. Or both.

Teletubby T-shirts revisited

When the Teletubbies were still new, I suggested that we’d be able to make clothes with video panels in using polymer screens. Teletubby t-shirts. Flat panel cameras would allow these to be two way. They could display images but also act as a cameras. They could link to cameras in other people’s t-shirts. You could have a camera on your back that links to the video image on your front, making you appear to have a big hole through you.

Thought recognition and smart microwaves

Wired carries another interesting article on brain wave recognition of PINs via the headsets used to play computer games. Old stuff in idea terms perhaps but it’s always nice to see practice catching up. http://www.wired.com/threatlevel/2012/08/brainwave-hacking/

It seems obvious that this could work nicely with the flat lens idea. A flat surface could image the electrical activity in the brain from a greater distance instead of having to use a helmet.

It would also be possible to put flat cameras on the inside surfaces of microwave ovens, looking at the food to see where the hot spots and cold spots are, so that the microwave beams could be directed better to the areas needing heated.

I think that’s enough for now.

Spotify definitely isn’t the future for music. So what is?

Rant ahead, move along if you aren’t interested.

My final update on Spotify. I gave up. I cancelled and there will be no more chances now. They have lost me permanently. Content-wise, it was far better, with a lot of stuff I wanted now available, albeit they have the same probs scanning in albums as me, with some tracks mixed up. I don’t mind paying £5 per month to ditch the ads and stream, which is what I thought I’d bought. It implied very strongly when I subscribed that I could stream it, but it turned out that wasn’t true. My squeezebox insisted I couldn’t use it because I need a premium subscription. Apparently the £5 per month one isn’t sufficient. I wasted a little cash but I will survive. I played 10 songs during the trial period, and had it 3  months, and that is the same price as buying them, which is easier to do and I can play them anywhere. If I can’t play stuff via my squeezebox, I don’t want it.

There is one other fault that is worthy of mention. When I wanted to cancel, I couldn’t find Spotify on my PC any more. It had totally vanished. That has happened a few times before. I didn’t remove it, it just left. Why they should remove an application I am actively paying for is totally beyond me. That really is the final straw. I’m done with them. I recommend you find an alternative if you’re shopping around too.

I know many of you have a good experience with it. I didn’t, and I’ve now given them several chances. It isn’t user error. I’m not thick. Spotify works for some people on some devices. It doesn’t work for me on mine. Bye bye Spotify. I’ll try an alternative.

The following is my original piece, what I wrote above is just an  update. Just bear in mind that some is now out of date.

 

Old blog follows:

So, I just cancelled my Spotify premium account. I gave it a good try – just over a year, so that’s over a hundred quid, and I reckon because of the problems using it I have listened to about 100 tracks over that time. Pretty poor value for me. It can be used, but is so difficult to use with my setup, I hardly ever did. And when I tried, usually the licenses had expired so it would spend ages downloading them again before it would let letting me listen. And usually several of the tracks on each playlist were no longer available. And worse still, on three occasions over that time, the whole application has gone missing off my PC spontaneously and I have had to download it afresh.

When I just want to listen to a music track, I don’t want to have to find the Spotify page, download the app again, wait ages while it installs, resyncs a few hundred tracks across all my playlists, clogging up my internet access for ages, log in again, figure out why it won’t talk my Squeezebox any more, fix the complaints by the software that my Squeezebox is logged in so I cant log in via my PC, put up with the inexplicably bad interface to the Squeezebox, wondering why the hell I can’t just use my PC version and then click a button to stream it, then take a trip to the lounge to change channel on my media system, then come back, switch off the one on playing on my PC speakers at the same time, and then figure out which of the two playlists I now have up is the right one, and then work out that the reason it isn’t playing the one I want to listen to is no longer available from Spotify, then figure out how to go back to the Squeezebox interface and find it on my hard drive from my CD collection, then play that, then wonder how I get back onto Spotify without losing the track playing, then try to find which playlist I had going…. etc etc.

Spotify does not work for me. It is better than Napster, but only on a 3/10 score is better than a 1/10 score basis. Both are total rubbish when used with a Squeezebox in another room. Part of that is the Squeezebox’s (Logitech’s) fault, part Spotify’s but if they have an agreement to work together, and claim to do so in their sales pitches, then it is both their faults. My Squeezebox is wonderful when it works. When!

So that’s why I cancelled. I clicked the ‘don’t use enough’ button on their form, but couldn’t click all the others that applied because they only permit one option. I didn’t use it enough because it is total crap. The only reason I didn’t cancel earlier is because I kept forgetting to.

Spotify is fine on just my PC, but then I don’t need the streaming, so the free one is fine, I just turn down my speakers when the adds come on.

OK, let’s move on from Spotify and my darned Squeezebox. I like listening to music, when it’s easy. When I used CDs I listened frequently. Then I got my first MP3 player, and much later various iphones. I have never used any of them more than a few minutes at a time. Having all your music on an easy button click means that with my hamster-like attention span, I hit a new track every few seconds and my enthusiasm quickly burns out. A kid in a sweet shop soon gets sick. And anyway, my iPhone battery seems to be empty every time I pick it up. Another piece of crap but that’s Apple for you.

I use my PC to store all my CD music, and rarely use them now. One problem I have and I am sure must share with others is that on iTunes some tracks get misnamed or worse still, just come over as unknown. I made the huge mistake once of letting iTunes reorganise my library and everything got so screwed up I had to scan in all my CDs again. I own about 20 tracks I bought from Amazon or Napster. They are on my PC, but are always hard to find when I use the media server or Squeezebox because the interfaces are bad. So even there, with music I own, on my own PC, listening is OK to a point, but still has loads of problems. I am listening to a playlist right now and picked ‘play all’, but I still have to go into the Logitech screen every track to make it play the next one instead of  letting it repeat the same track endlessly. It doesn’t work! It isn’t my fault. I am reasonably smart and have 30 years IT experience. If I can’t use it, it is designed badly. Simple as that.

I have a new Freesat system with a hard drive, and am told I can use that to store and play my music. I’ll reserve judgement on that till I try it. I haven’t plugged it in yet.

The future

So how do I get music? I don’t want to use a personal MP3 player all the time. What I really want is to be able to just see a big swathe of album covers, preferably virtual ones hanging in space in front of me, and touch one, then pick the track, or do all that with a playlist. Or speak a voice command, or use a simple search tool by .

When I play it, I want to watch the music video, and I want music made for full 7.1 surround, not bloody stereo. I want to feel I am there in the studio or concert. I want full sensory, full immersion music, with every sense stimulated in synch.

I don’t mind paying. I have never listened to a track I don’t have the legal right to listen to. That never has been an issue. I have bought a lot of what turned out to be rubbish and I’d like a refund please. Same with all the many dupes I own. Can I sell them please? Also, can I give in all my vinyl LPs and get lifetime licenses to digital version please? But I won’t hold my breath on that.

I want to pay a subscription to something a bit like Spotify, but a more professional one that sort of works. I want access to all the other music. And when I spend time making  a playlist, I don’t want to find 20% of the tracks won’t play next time I access it. I want it to integrate seamlessly with my owned tracks, in the correct sense of the word, not exaggerated sales hype. And I want to be able to point at any set of speakers in my house, or anywhere else for that matter and stream it from there, now. I don’t want to fight battles with software or have to log in to anything, or to update software, or re-establish internet connections, or be told I cant use it in the lounge because I am logged on in the office.

The music industry insists on being paid. But by doing so in such clumsy and badly implemented ways, they have destroyed any pleasure from listening to music and alienated countless customers. I tried to buy CDs, but Apple can’t copy them properly onto my PC. My PC can’t stream them reliably through my Squeezebox because of Microsoft and Logitech. No music subscription service I can access on the Squeezebox is any good at all. So I’ll keep the money in my bank account. I listen to music so much less now because it’s such a pain, so the novelty doesn’t wear off any more, so I have enough. A small loss to the global music industry perhaps, but many others aren’t willing to pay at all so I am part of the group they needed to keep on board. For 20 years they have been trying to get a working business model. This isn’t it.

Spotify aimed at the future, and missed.

Only pay top pay for top people

We often hear organisations say they need the best people, therefore have to pay the best too. This line of argument is seriously flawed but is cited in every boardroom remuneration battle. It too often results in highly excessive reward for mediocre performance. In many cases, someone as good or even better could be employed for far less.

I meet a great many CXOs in my line of work, and with a few exceptions who really are worth their pay, I have noticed very little correlation between rank and overall capability or quality of judgement. Why should people be paid much better if they aren’t a lot better than their potential replacements? There are a few stars who ought to be rewarded, but most senior posts can be filled just as well at lower cost. Only vested interests maintain the ubiquity and longevity of this flawed reasoning that top executives have to be paid very richly within a company. 

In the vast majority of situations, and at every stage of promotion, a number of candidates apply for the job. There is usually very little to choose between the top candidates, but someone has to get the job, and it goes to the one who performed marginally better in the interview. What is then forgotten is that although the job has been filled, there are still several equally good people who could do it. If the winning candidate were to move on for higher pay elsewhere, any one of the others could easily pick up the baton and probably do just as well. It is therefore nonsense that the pay for the job has to be a lot higher than the grade below. If it were just 5% bigger than the lower grade, it would still be filled by someone just as competent. People would still want the more senior job because it is more senior. Pay is actually one of the lesser incentives, power being a greater one.

If each grade were paid 5% more than the grade below, wages would be much flatter. Typical blue chips have about 7 layers of management, and even this is open to question in terms of wisdom. That means that the top job only really needs to pay 40% more than the lowest grade. If an executive then performs far better than expected, they could be rewarded by bonuses, just like any other staff. If such a remuneration policy were implemented, it would save companies a great deal of money.

Of course, experience should be rewarded too and a wage scale within each grade is still useful to reward people who stay with a company as they become more useful. It would be reasonable to implement a bigger differential between the top and bottom of a scale than between scales. A higher grade might mean more responsibility or longer hours, but doesn’t necessarily need significantly more talent, and usually the job could be done by any number of people at the layer below. Therefore, promotion should be rewarded less lucratively than progress up each pay scale according to experience and tenure, which does correlate very highly with being more useful. Too often, someone who is excellent at their job is promoted to one where they are less excellent, and the company suffers (as does the person). Rewarding skill and experience within the job is often a better idea than promoting someone.

Clearly, some people do deserve to be paid much more than their colleagues. In many fields – design, leadership, research, engineering, teaching, law, medicine and so on, there are always a few high fliers who are so good at their job that they produce many times the value of their more ordinary colleagues. A top engineer might invent many of the key products on which the company depends, whereas many others perform at levels where they are easily replaced or outsourced. A top designer might make the product so appealing that it sells far better than it would otherwise. Companies should try hard to keep such people since they generate a disproportionate amount of income. But even here, pay is only one of a range of incentives that appeal to people, so companies should spend more effort looking at the individual’s goals and desires and target them more accurately. Bonuses and pay can be used of course if that is appropriate. In this case, there is no good reason a top designer should not be paid more than the CEO.

So, the problem is not that some people should not be paid more, it is that it isn’t always necessary to pay more. Just beating a few other candidates at an interview does not in itself guarantee that a person is much more valuable than others who also applied. In most cases they aren’t.

So, how to identify those that should be paid more? Simple. Top people stick out. If they don’t stick out, they aren’t top people. Top people don’t get discovered at job interviews. Often they don’t even apply for promotions because they are already exactly where they want to be.

If a product is hailed as having a wonderful design, find the people who were responsible and reward them. If a team performs well ahead of expectation, first reward them, and then ask them why they did so well. If they think that excellent leadership was a key factor, then reward the leader again too. Just don’t always jump to conclusions and always reward the people who happen to be in charge at the time something goes right. It may well have happened anyway, or even in spite of their involvement.

One of the big problems that many companies are now discovering is that top people no longer want to work for them. Often those people have found that thanks to the net, they can work freelance on a contract by contract basis for the highest bidder. Some of them can’t now be bought at any price as permanent employees, other will respond to higher offers. The result will be a small elite who are highly rewarded, and a large majority who are simply commodities and whose skills can be acquired at low cost either locally or from other countries.

So, what of the companies paying high salaries for top people. Well, some of them deserve it. Having them on board can save a company or dramatically improve its performance. But the simple truth is that most of the so-called top people are not top at all, but only marginally better than the competition at a series of interviews. They deserve 40% more than the junior manager, and not a penny more. We need to spend a lot less on high blanket remuneration of all executives, and start spending a little effort on identifying the really top people and reward them instead. It doesn’t take that much more effort, because as I said, the top people really stick out, and if they don’t, they simply aren’t top people.

Connecting up? let’s shake on that. Guest post by Chris Moseley

“Let’s connect up!” A former American associate of mine used that phrase all the time and nice lady that she is, those words always had an empty, rather dread ring to them. “Connecting up” invariably meant participation in a teleconference where, blind to each other’s facial expressions, attire – hairstyles! – the contributors to the so-called ‘conference’ were left anxiously trying to assemble layers of meaning and depth from each other’s lifeless pleonasms. The communications experience was never much better when we actually saw each other; teleconferencing offered its own unique brand of awfulness, which unvaryingly got in the way of good discussion. Of course there is nothing unusual about this type of experience – it’s common in fact, which makes it all the more dreadful. With all the technology that has come about to help us ‘connect’, much faster and with less effort than ever before, we have become ever more detached from real, flesh and blood relationships. Digital communications simply does not cut it when it comes to developing a relationship. Of course we all know the mantra, the arguments for communications technology. It’s an important tool that helps us to make plans more efficiently, and to stay in touch with friends and loved ones. It is a portal to our business world – to making money! It has even proved to be critically important to the cause of liberty and democracy, witness the events that led to the Arab Spring. And yet I feel that we’re all missing out terribly by confining ourselves to studying our smartphones instead of reading the faces of the people around us, or by choosing to text a few words to a colleague in the office via Skype when he/she is only a few feet away (oh, yes, this is really happening more and more now). I suppose we must keep faith and hope for common sense to lead us back to a sensible blend of technology and good old-fashioned human contact. Or perhaps those clever fellows at BT, Ma Bell, Deutsche Telecom or Telstra will find a viable substitute via interactive holographic technology, or some form of advanced avatar communications. Mmm, I believe that I would still rather shake someone’s hand and, err, smile.

Chris Moseley, 17 Mile Studios, Brisbane, Australia

www.17milestudios.com.au

To each according to their effort

This entry now forms a chapter in my book Total Sustainability, available from Amazon in paper or ebook form.

Blocking Pirate Bay makes little sense

http://www.telegraph.co.uk/technology/news/9236667/Pirate-Bay-must-be-blocked-High-Court-tells-ISPs.html Justice Arnold ruled that ISPs must block their customers from accessing Pirate Bay. Regardless of the morality or legality of Pirate Bay, forcing ISPs to block access to it will cause them inconvenience and costs, but won’t fix the core problem of copyright materials being exchanged without permission from the owners.

I have never looked at the Pirate Bay site, but I am aware of what it offers. It doesn’t host material, but allows its users to download from each other. By blocking access to the Bay, the judge blocks another one of billions of ways to exchange data. Many others exist and it is very easy to set up new ones, so trying to deal with them one by one seems rather pointless. Pirate Bay’s users will simply use alternatives. If they were to block all current file sharing sites, others would spring up to replace them, and if need be, with technological variations that set them outside of any new legislation. At best judges could play a poor catch-up game in an eternal war between global creativity and the law. Because that is what this is.

Pirate Bay can only be blocked because it is possible to identify it and put it in court. It is possible to write software that doesn’t need a central site, or indeed any legally identifiable substance. It could for example be open-source software written and maintained by evolving adaptive AI, hidden behind anonymity, distributed algorithms and encryption walls, roaming freely among web servers and PCs, never stopping anywhere. It could be untraceable. It could use combinations of mobile or fixed phone nets, the internet, direct gadget-gadget comms and even use codes on other platforms such as newspapers. Such a system would be dangerous to build from a number of perspectives, but may be forced by actions to close alternatives. If people feel angered by arrogance and greed, they may be pushed down this development road. The only way to fully stop such a system would be to stop communication.

The simple fact is that technology that we depend on for most aspects of our lives also makes it possible to swap files, and to do so secretly as needed. We could switch it off, but our economy and society would collapse. To pretend otherwise is folly. Companies that feel abused should recognise that the world has moved on and they need to adapt their businesses to survive in the world today, not ask everyone to move back to the world of yesterday so that they can cope. Because we can’t and shouldn’t even waste time trying to. My copyright material gets stolen frequently. So what? I just write more. That model works fine for me. It ain’t broke, and trying to fix it without understanding how stuff works won’t protect anyone and will only make it worse for all of us.

Will Barclays become a Not-For-Profit company?

It has been interesting watching the protest by Barclays shareholders.  It made me think about what is happening here. I wonder if what we are seeing is the start of a new trend, or whether it has been going on for ages but I just never noticed it before. Anyway, a picture paints a thousand words.

Us and Them

Staff in many big companies (mentioning no names, but this is more widespread than it ought to be) will have experienced the feeling that the company thinks of them as a drain on resources. It feels to them that they are continuously made to work harder for less. Temporary staff and contractors may be treated even worse, as disposables even. It is sad because the staff are the ones who do the work, and they ought to be fully rewarded for doing a good job. Government and the tax man are well used to being treated as the enemy, but have big enough guns to fight their corner. Suppliers are well used to having to fight for every penny, but usually can demand a decent return because of their competitive position. Society is a big stakeholder in most companies, as is the environment, but mostly they have to put up with what they are given, with government and regulators supposedly protecting them from the worst abuses.

It has always looked a bit ‘Us and Them’, but the number in the Us camp is falling. Society was the first casualty. Boards realise that they can use globalisation and tax specialists to legally avoid tax, exploiting any holes in the system left by incompetent tax authorities. This problem makes daily news now, with company after company being shamed for hiding away from their tax duties in cracks in the rules. The rest of us have to pay more tax because some of the richest companies avoid paying theirs. Global companies search globally for the biggest cracks and set up there.

Customers, and savers in particular, used to be treated better too. Some banks have started using confusion marketing and other dirty tricks to reduce how much they pay to those who provide the money they need to rent to others. I am a long-standing customer with Barclays and have certainly noticed their policy to do all they can to avoid paying me interest any more. They rely on the fact that most of us won’t care enough to actually bother to move accounts. So at least as far as some big banks are concerned, customers have migrated gradually over decades out of the friends list and are now firmly in the ‘them’ camp.

The shareholder used to be the focus of corporate loyalty. Staff were forced to work harder to generate better shareholder returns. It seems that idea has been trumped in Barclays, but they aren’t the only one. I may only have noticed this new aspect of evolution, but now that I think about it, it is really only the latest extension of a long trend of paying higher and higher executive rewards, which I certainly have noticed. CEOs and directors have been overpaid for quite a while, as I have blogged about previously. A small number are worth what they are paid, the rest could easily be replaced by any number of people just below them with no noticeable loss to the company. But for boards to treat shareholders as competition for rewards seems new to me.

If a big company has previously been owned by a family, the small number of major shareholders are often board members themselves, or at least have good representation, so there is no problem. When a company has been listed for a long time, shareholders can be spread over a large population, so it is hard for them to defend their interests. The web makes it easier for them to organise protests, but it is still very difficult to mobilise enough to actually change anything. A few large pension funds or other investors may have some clout, but they may have a very hands off approach and may not be very interested in intervening. It is then that directors can start to manipulate the company as if it were their own. As directors often have directorships in a number of companies, they can act for their common interests, advising on high rewards for each other, until they end up taking the lion’s share of rewards for themselves and their friends, with shareholders pushed into second place. The ‘Us’ camp has been reduced to the board room. Everyone else is competition.

It isn’t quite so simple though, as a few other parties can demand high shares, even if they are not seen as friends. In big banks, the rewards have to be shared with experts, without whom there would simply be no rewards to share. This includes their own traders, tax consultants and a few others. Boards have to pay the going rates for them. They aren’t friends so much as partners. They have to be treated with respect simply because they can demand it.

If this trend were to continue a while longer, shareholders may end up with less and less. The more distributed the shareholder base becomes, the harder it is for them to mobilise their power, so the less effective power they hold. Boards can ignore them more and more easily. Customers will pay more, savers will be paid less, staff will be paid less and worked harder. Taxes will be minimised, risks passed as much as possible onto society and the taxpayer. The maximised profits and minimised risks will be directed as far as possible to the Us people running the company. It could essentially become a not-for profit organisation, with very highly paid board members and other key partners, low profits, and thus little left for dividends and taxes.

 

Are advertising and Apple expenses we can do without?

If you wage war with someone and he gets a bigger gun, you feel pressured to get one too. It’s the same in the war to take your money. If everyone else spends a fortune on advertising, you are likely to feel forced to do so too. But it costs, heavily, and those costs ultimately have to be recovered in higher prices.

When you click on an ad on a website, an advertising company somewhere typically gets about £0.50. That 50p plus has to be recovered when you buy the product, but many of the clicks are ineffective, and there are other expenses in the whole chain apart from the actual click fee (the seller’s own staff, banking costs, accountancy, management etc). Whether you even notice ads or have ever clicked on one, the money you hand over nevertheless subsidises a great many ads, and the ultimate price you pay is much greater than the price that would be needed without advertising.

Nothing new there, but advertising has become a significant and unavoidable extra cost along with taxes and banking fees (and parking charges if you buy in town). You don’t get a choice whether to pay extra to buy via an advertising route or get it cheaper by somehow buying direct. Add up all the web ads, junk email, text messages, paper junk mail, newspapers and magazines, TV and radio advertising, and the whole advertising mark-up is big.

Advertising doesn’t just increase costs. With the exception of some wonderfully entertaining ads, many involving meerkats, adverts waste our time too. Count up all the hours people waste fast forwarding over the add breaks or even sitting through them, and consider the significant personal stress directly resulting from the irritation they cause, that may have a small but finite impact on health. Add to that the extra demands on landfill from the paper junk mail, plus the wasted time opening and sorting the waste. The negative impact on our lives, the environment, and on  the overall economy is vast. Sure, the ad industry creates jobs, but jobs in advertising don’t generate wealth (though there are obviously cash flows between regions). Like banking and the public sector, advertising is a drain on resources. It syphons money from the productive economy and impoverishes us. 

On the other hand, advertising pays for a great deal of what we use on the web, watch on TV or read in newspapers. Some of that wouldn’t exist if the advertising went away, though some would survive via other business models. We’d still have to pay for the things we want to use somehow, so any notional extra fees and administrative inconvenience can reasonably be offset against advertising’s negative impacts.

But even with that offsetting, we really should challenge the cost:benefit ratio in advertising and see if we can find better ways of letting suppliers make potential customers aware of the merits of what they have on offer.

Advertising is only one strand of marketing of course. Marketers know that people want to learn about their new products when they are potentially interested. Context is key. If I have just eaten, I am not interested in marketing from nearby restaurants. If I haven’t, I might be. Using context makes direct marketing possible, especially knowing the location of the user and their tastes and preferences. I will gladly pull information from companies willing to sell me stuff I am interested in, when I want it. They won’t have to pay anyone. Pull marketing is potentially very low cost to both parties, providing the consumer with the info on suppliers’ offerings so they can make an informed decision on what to buy. If we moved entirely to that sort of model, we could greatly reduce the price of everything we buy while saving time and stress.

It is certainly possible to build such a system and make it work well. The technology exists and we’d all be far better off. The really huge problem is that we have bought into the smartphone model, buying iphones, pads or similar, and were taken in so well by beautiful designs and features that we didn’t look under the covers. What we didn’t consciously buy, but bought nonetheless, were devices that only give us access to things on condition that Apple or another big manufacturer gets a big slice of the price, via a variety of mechanisms. A smartphone is perfectly capable of providing exactly the platform we need to save lots of unnecessary spend, but Apple has used its power to extract its own slice of our spend not just at device purchase but throughout its lifetime. Not only has it not let us avoid the expense of advertising, it has added its own extras on top. It has made the situation even worse. Most other companies also use strategies that are designed to get into the most lucrative position in the value chain, expanding the price increase industry.

As I remember it in the beginning, the web was meant to get rid of intermediaries and save costs, making the economy more efficient. What has happened is that layer upon layer of new intermediaries have become adept at selling us products and purchasing systems that allow them to skim off extra slices of revenue for themselves. Anyone working in IT is very familiar with the many layered system architectures, and each layer is another opportunity for some company to take a slice of the revenue passing through. All add ultimately to the purchase price, and companies like Apple win several times because they control several of the architectural layers that their devices are used in. But we are suckers, and keep buying them. Because the extra costs are cleverly hidden or disguised or renamed, we don’t notice them until it’s too late.

I may sound critical of Apple, but all they are doing is to maximise profits for their shareholders, whilst giving customers products they can’t resist. There is no fault there. The same goes for Google or Facebook or any other intermediary. It is the model that we need to change, not companies, who will always do what they can to make the most money. That’s what companies are for.

I’ve written often about cloud nets and digital jewellery nets and the forces of censorship and surveillance and web-based politics and the consequential likely emergence of sponge networks. Check them out in my recent articles list. Freeing ourselves of parasitic companies and advertising is another potential pressure. It may go two ways. We could simply recreate exactly the same problems all over again, just swapping one set of intermediaries for another. Sadly, that is the most likely outcome. History teaches us best that we don’t often learn from history.

But, and this is a long shot, but one that would really help make the world better, we could make devices that people buy, and are then free. No charges for making apps for them, no push advertising, completely open, highly context aware, and high powered, yet completely free to own and use after purchase. Even the comms could be free. They would be capable of everything that you do now, and more. We could use them to talk direct to suppliers and do business with them without anyone else involved. It is even possible to design a free payments and banking system. We could avoid paying anyone except the device manufacturer, once, and the companies we want to do business with using the devices. And with all the time and money we would all save, none of us would mind paying a fair price for such a device. Many people paid via advertising would have to find alternative support models, but the economy would be better off, the rest of us individually would be better off, and the environment would be better off. It is hard to see a downside.

History tells us we will still pick the other system and pay more for a worse life.

Capitalism 2.0

This entry now forms a chapter in my book Total Sustainability, available from Amazon in paper or ebook form.