Category Archives: city

Driverless pod transport system

I badly documented my latest idea of an ultra-cheap transport system in I think I need another blog to separate out the idea from the background. Look at my previous blog for the appropriate pictures.

We’re seeing a lot of enthusiasm now for electric cars and in parallel, for self-driving cars. I support both of those, and I like the new Next system that is extremely close to my own ideas from 1987 when I first looked at cars from a performance engineer’s viewpoint and realized that self driving cars could drive millimeters apart, reducing drag and greatly reducing congestion. I estimated back then that they could improve road capacity by a factor of 5. Many others have since simulated such systems and the same factor of 5 has popped up a few times now.

Self-driving pods and electrically assisted bike lane

Self-driving pods and electrically assisted bike lane


Next have visualized the same idea nicely, but the world is more receptive now. for their nice video, although I’d envisage rather more pods in most areas, almost filling the entire road area.

I’ve lectured in vain many times to persuade authorities to divert investment away from 20th century rail system to roads using self driving cars. The UK’s HS2 system is no more than lipstick on a 20th century pig. Pig it remains, obsolete ages ago, though our idiotic government remains determined to build it anyway, wasting £70Bn even by charitable estimates. Systems similar to Next’s could replace HS2 and reduce journey times for everyone, not just those whose starting point and destination are very close to the terminals. I wish them well. But I think there is an even better solution, that is feasible in a similar time-frame, and I have no doubt they could pick it up and run with it. Or Tesla or Google or Apple or Toyota or any other car company.

My realization is that we don’t need self driving cars either. Take exactly the Next system, with its nicely trapezoidal pods that nest together. They will need a smooth road surface if they are to ride in contact or millimeters apart, or they will constantly bump into each other and create irritating vibration. Make them ride a centimeter or two apart and it will solve that.

Then start looking at each part of the system.

They each have a computer on board to drive the pod. You don’t need that, because everyone has a smart phone now which already has formidable computing power and is connected to the cloud, which has vast amounts more. Together, the entire system can be easily managed without any computers on board at all.

Similarly, much of the internal decor in cars is there to make it look pretty, offer interfaces, information or displays for passenger entertainment. All of that could easily be done by any half-decent augmented reality visor.

Then look at the power supply and engines. We should at the very least expect electric motors to replace fossil fuel engines. Most self-driving cars have expensive batteries, using scarce resources, and lithium batteries may catch fire or explode. So some systems in R&D now use the idea of super-capacitors instead. Furthermore, these could be recharged periodically as they drive over special mats on the road surface, so they could be smaller, lighter and cheaper. Even that is now being trialed. So these systems would already be better in almost every way to today’s transport.

However, we don’t even need the electric motors and super-capacitors. Instead we could update the ancient but well-proven idea of the linear induction motor and make factory-produced mats containing circuits that can be instructed to make steerable magnetic wells that pull the cars along, as well as navigate them correctly at every junction. Again, the management can all be done by the cloud plus smartphones, and the circuits can reconfigure on command as each pod passes over them. So they won’t need batteries, or super-capacitor banks, or engines or motors. They would just be pulled along by magnetic fields, with no moving parts (apart from the pods as a whole of course) to go wrong, and almost nothing needing expensive maintenance. Apart from wheels, suspension and brakes.

So the driverless pod would not need a built-in computer, it would not need an engine or motor, and not need a battery or super-capacitor. Already it would be vastly cheaper.

The last remaining moving parts can also be dispensed with. If the pod rides above a mat that can generate the magnetic fields to drag it along, why not let other magnetic fields suspend it above the ground? That would mean it doesn’t need suspension, or wheels. Conventional brakes could be dispensed with using a combination of magnetic fields for normal braking,  combined with a fallback of gravity and brake strips for emergency braking. Reducing the levitation field would create friction with the road surface and stop the vehicle very quickly, far more quickly than a conventional car can stop, only really limited by comfort limitations.

So my proposal is a system that would look and behave very similar to what Next have designed, but would not need engines, batteries, on-board computers or even wheels. My pods would be no more than simple boxes with comfy seats (or empty for freight transport) and a couple of strips on the bottom and might cost no more than $200 each. The road would have a factory-made mat laid on top for the magnetic well trains and levitation. Adapting a road to the system would be an overnight laying out of the mat and plugging it in to the electricity supply. In cold seasons, that electricity supply could also power on-board heating (but that would incur extra expense of course)


transport system

It won’t be long before such a system could be built. I can’t see any fundamental barriers to a prototype appearing next year if some entrepreneur were to try. It could make self driving car systems, even Next’s current proposals, redundant before they are implemented. If we were to change the direction of current plans to utilize the latest technology, rather than using ideas from 30 years ago, we could have a cheaper, better, more environmentally friendly system even faster. We could probably build such as system in every major city for what we are going to waste on HS2. Surely that is worth a try.


An ultra-cheap future transport system.

transport system

Some of my followers might remember this idea I invented way back in 2005, and have blogged a few times since, such as in


The idea is simple enough: use a linear induction motor built into a rubber mat laid out on a bike lane to drag a metal plate attached to the bike front forks. The bike moves faster with less effort (though you can still put in as much effort as you want), and you get to the office less sweaty. Since your bike goes fast, the cars won’t need to endanger you by overtaking in unsuitable locations. The mat is laid out overnight and plugged into a nearby lamp post for electric supply. This was much more nicely illustrated by a proper illustrator in a report I just did with Hewden, the equipment hire firm:


I’ve since thought about using the same idea for the larger transport pods, which we imagined as self-driving vehicles in the report and picture.  There is no reason at all why a scaled-up version couldn’t be added to them too (just imagine them with a plate underneath to drag them along), then you don’t need the engine and once you go down that path of thinking, lots of other things start falling out. Read on.

Important note: no endorsement of any of this content by Hewden or any other company is implied. If you don’t like any of what follows, blame me and Futurizon Limited.

I think we may be about to see the biggest disruption of any industry. The transport industry is ripe for three waves of disruption. It knows all about the first two but seems to have totally missed the third, and yet it could be just a few years away. Every part of the industry will be strongly affected and some of it will be wiped out – whether it’s vehicle manufacture, servicing, fuel, spare parts, tires, brakes, or driving, it will change beyond recognition.

In the first wave, the internal combustion engine is starting slowly to give way to hybrids and all-electric vehicles, with talk of fuel cells, hydrogen, super-capacitors and so on. This wave is very well known and already well absorbed into every industry strategy. This week I helped promote the ‘go ultra low’ campaign. I am all in favor of using electricity instead of burning fuels wherever economically feasible, especially in city areas, even if the electricity comes from fossil fuel power stations. People should breathe clean air, not air full of exhaust gases and particulates.

The second and related wave is the push towards self-driving vehicles. Again, everyone that needs to probably already knows all they need to about it. They certainly have no excuse if it affects them and it still manages to catch them by surprise. Cars driven by AI coupled to sensors monitoring everything around the car can react in microseconds and talk to each other, so they can drive very close front and back and side by side so roads can hold 5-15 times more cars, all driving at a good speed. They can interleave automatically at junctions without even needing to slow down significantly instead of being stuck behind someone who is waiting for an invitation in triplicate to arrive signed by the Queen before they proceed. Self driving cars would not eliminate congestion, but they would very greatly reduce it, almost eliminate accidents, save pollution and resources and be far more socially inclusive than buses or trains. They have great potential to improve our lives in many ways, but obviously would make a lot of drivers redundant. They would also shift power from conventional car manufacturers to IT companies who are best placed to develop the intelligence and control systems. No surprises there at all, we read this stuff every day now.

However, we don’t even need self-driving cars. They are barely out of the lab, lawyers are still arguing over how insurance and liability for accidents should work, and already their end is in sight. Self-driving cars could be the next Betamax.

The third wave is driverless vehicles that don’t even need an engine, or batteries, or even supercapacitors, or the huge expenses for all the sensor equipment and onboard computers and all the other electronics. They don’t need much in the way of electronics or electrics at all. We might have the first buses in history that are simpler than a bus shelter.

This 3rd wave won’t even be electric vehicles!

Forgive my use of powerpoint graphics, but with generic vehicles, boxes make a good start point anyway, vehicle designers can design them any which way they like:


This wave will reduce the vehicle to little more than a moving box. It might have comfy seats and air conditioning added, but apart from that, it doesn’t need much else. Really it doesn’t. They could have wheels, and that would reduce electricity requirements somewhat, but then wheels would cost more and bring other issues, so they will be optional and we all know future cars are meant to hover anyway. If they do have wheels, they would still use the plates near the road surface just as the non-wheel versions. There is no need for brakes on the wheels if there is a long braking pad on the road surface for emergencies. One of my first ever engineering jobs was designing an electromagnetic braking system that pulled a brake pad onto another using magnetic field. If it worked in 1982, it will work in 2020.

The most basic version of such a vehicle would be literally an empty box with three pads on the base. It would be used for carrying goods. Two of the pads would levitate the vehicle, propel it, steer it and stop it. The third pad would be a high friction pad that would stop the vehicle very rapidly if necessary. That’s it. This kind of vehicle would only cost whatever it costs to make a thin plastic or carbon fiber box and stick two thin strips of metal on the base and a strip of brake pad. $200 is a reasonable estimate. For people transport, cost depends on the level of comfort needed. It won’t crash, so a minimum requirement is a plastic seat and a safety belt to stop you falling off, shaped to sit on the pads underneath and nest easily into the one in front for storage. Again, that could easily be mass-produced for $200.


Higher comfort versions could be made of course, where the passengers are fully enclosed, sound insulated and air conditioned, sitting on nice comfy leather seats on nice soft suspension. Even then, they still don’t need any engine or battery, or any electrics other than lighting, sound cancellation and air conditioning system. But there is nothing to stop car manufacturers continuing to make high luxury cabins if they want, there just might not be much of a market for them.

Lots of the electronics in modern cars is not really needed. We already have enough computing capability in our mobiles to do all our entertainment, navigation, location, comms between vehicles, all the IoT management. Your phone knows where it is, can get you all the media and comms you can eat, and can do the noise cancellation too. Decor is irrelevant once we have augmented reality – you can sit in a blank box and make it look as if you are in any place or any vehicle you want.

Propulsion doesn’t have to come from an engine, not even an electric motor. Decades ago the first linear induction transport system was built and now there are lots of trains using that mechanism, some travelling at very high speed. However, technology has moved on. We don’t need a huge rail for our boxes to sit on. It’s easy to suspend the box on strong magnetic fields and those fields can be produced and shaped easily, especially using graphene or superconductive materials, but perfectly adequately using conventional materials and strong permanent magnets. Position the plates on the base of the box in nicely shaped magnetic wells and they will stay there. The magnetic wells can be shaped as the vehicle goes along to direct it any way it needs to go. The passenger’s mobile knows where the passenger wants to go and can talk direct to the cloud based management system, which can control invisible ‘points’ in an invisible re-configurable ‘railway’ beneath the vehicle. If there is no passenger and only freight on board, the management system still knows what to do with each box and can navigate it correctly. So it is a travelling magnetic well drive. Steering the wells steers the cars or pods. It doesn’t have to use classic linear induction motors, it just needs to be able to move magnetic wells. Linear induction motors are one way of doing that, but anything that can shape a magnetic well for the pods to sit in, and make them travel along, will do. There are lots of ways to skin a cat, so they say.

A factory-produced mat can be laid out on a stretch of road overnight, plugged in to an electricity supply, and these vehicles could be carried on it the next day. Vehicles that need to slow down could have their kinetic energy recovered and transferred to others that need to accelerate. Total energy costs would be low.

All the benefits of self-driving cars would still hold. The vehicles can still be millimeters apart in each direction so could still reap all the congestion benefits, along with virtually zero drag. Not needing any engine, motor or battery or capacitor bank on board would greatly reduce the amount of resources needed to make a vehicle and the energy needed to propel it. Recognizing that almost all the electronics needed sits happily inside a mobile saves a lot more resources.

Grabbing a vehicle would be done by direct discussion between the mobile and city transport system. Any empty vehicle would simply pull over, you get in and get off at your destination. Cost could be low enough to absorb into normal city running costs. If vehicles are designed to nest into each other like supermarket trolleys, and if they really only cost about the same, they would require minimal storage space, liberating car parks and taxi ranks for other uses.

So our vehicles really could be just simple boxes with minimal additions for basic comfort or high luxury. On nice days, they could be open, on rainy days, you pull the hood over. In colder climes, there might be sides and doors.

Here’s a quick summary of the key points:


Internet-of-things is enabling the systems needed to track obstacles such as pedestrians, linking to ubiquitous sensors and cameras, so all the safety side is entirely feasible too without having to put it in the vehicle. Our mobiles and digital jewellery will work with lots of different kinds of security systems to ensure that pods don’t go anywhere without knowing who is or what is on board, preventing terrorists from filling them up with explosives and sending them to a target. Delivery pods would only open when properly authorised. Suspicious passengers or vehicles could be locked and routed automatically to safe inspection points.

I’m not going to build this, but someone will. If it’s you, buy me a beer when you get rich and make a donation to a homeless people’s charity. No new physics is required. As graphene becomes commercially available cheaply, as it will, it will become very cheap to put all the circuitry into cheap mats that can be laid out to do the work. Thieves won’t steal mats that only have carbon in them, whereas if they use lots of copper wiring, they might try. But understand that there is absolutely nothing to prevent someone starting development tomorrow and implementing this within a few years. This should be easier to build than self driving cars.

Reconfigurable circuits have been with us decades too, so rearranging the circuits to route each pod the right way at each junction is no problem. Electronic control systems too. A few bits of software need to be written, but then a simple box achieves exactly the same functionality as a self-driving car 100 times the cost.

So basically, conventional vehicles can be replaced by simpler and cheaper boxes. No engine, no fuel, no wheels, no suspension, no mechanical parts other than optional doors and sliding roofs, just comfy seats and life support systems. Almost all the frills via augmented reality and whatever else your future smartphones do. All the system management and control and data collection ditto.

In new cities, roads could be built with such a system in mind, with less street furniture and clutter. They would have clean air. Cheap and fast transport would encourage people to travel more, socialize more, live more, be happier. Cultural life would improve. Retrofitting it to existing cities would be easy too, just laying out factory-produced mats and plugging them into electric supply. With such ultra low costs, it would be the obvious choice for developing countries, helping to reduce CO2 production and demands on resources.

Lots of industries would be affected. We won’t need as much lithium of course, since these vehicles need no batteries. We won’t need as much steel, or aluminium, and we can recycle plastic to make the bodies and seats.

All the benefits of a self-driving car system at a tiny fraction of the price. What’s not to like?

Why Uber will soon be history due to a category error

I have nothing against Uber, I’ve never used them, or Hailo, but they are just as dispensable as their drivers. My next blog will be about my vision for an all-electric zero-emission driverless transport system and it has no use for Uber.

However, before I write that, I have a small issue to clear up. A couple of weeks ago I tweeted that the London cabbies who were protesting against Uber are very proud of spending years to learn the best way to get from A to B, yet a satnav device can calculate the best route in a few seconds (and though my tweet didn’t even go that far, any half-decent satnav will also take full account of the real-time traffic and congestion situation). A straightforward fact you might think, but a great many taxi drivers took offence at it, and not just in London. One taxi firm near Boston, even made a crude and ineffective attempt at a cyber-attack. Don’t give up the day job guys!

A future transport system using driverless cars doesn’t need drivers of course but that doesn’t mean that all of them will be out of a job. Carrying luggage, helping people with mobility problems and providing company and conversation on the way is a very valuable service too, as are provision of local tourist advice, general information, strongly held opinions on every possible topic and other personality-based charms. We won’t NEED taxi drivers, but I for one would really miss them.

Uber thinks they are well on top of the driverless car trend:

Perhaps it is just as well they want to go driverless because I’m told many of their drivers are starting to get angry with Uber too. Uber is wrong if they think driverless cars will make them the future. Possibly they will benefit for a short while during technology transition, but the simple fact is that future transport systems don’t need Uber or Hailo any more than they need taxi drivers. Since Uber pays very little tax on their large revenues, they are also putting themselves on the wrong side of public opinion, and that is not a very clever thing to do at all: Their worst error though is that their vision of future transport technology is focused on the current state of the art, not the future. If you are planning a future strategy, you absolutely should not base it on today’s technology.

They say they will buy all of Tesla’s output of self-driving cars: Well, I hope they can make them pay fast, because they will be obsolete very soon indeed. Uber won’t survive long, not if they make this kind of error. Technology will soon make Uber irrelevant too, and unless they improve their corporate values, not many will bother to turn up at their funeral unless it is to gloat.

Google will presumably also want their self-driving cars out there too. The rest of the car industry also won’t go down without a fight, so there will be a many a battle to establish market share in self-driving cars. Apple will want all their self-driving cars out there too. Until 5 minutes ago, I thought there was just the tiniest possibility that Apple were going to be a bit smarter. Maybe Apple had noticed the same thing I had. But no, a quick Google search confirms that Apple have made the same mistake too, and just bought in the wrong guy: These companies have other businesses so won’t really care much if one project goes down. Google, Apple, Samsung, LG et al will be far more likely to flourish in the real future than Uber or Hailo.

The error is very serious. You’ve made it, I’ve made it. The entire auto industry has made it. It’s a category error.

We’ve all been conflating ‘driverless’ and ‘self-driving’. They are not the same.

The future doesn’t need self-driving cars, it needs driverless cars. They both save lives, save the environment, save resources, save congestion, save time, and save cost. One saves a little, the other saves a LOT.

The entire car industry, as well as Uber, Google, Tesla, and even Apple have all bet on the wrong one, but some have better chance of surviving the consequences their errors than others. I’ll outline the basic principles of the technology waves that can wipe out self-driving cars in my next blog, and actually since the technology is easier in many ways than getting self-driving working, it could even bypass them. We may never see an age of self-driving cars. We can get a far better system, far faster and far cheaper.

It is time to consider any investments you have in the transport industry. Severe turbulence ahead!

2045: Constructing the future


Today is the day Marty Mc’Fly time traveled 30 years forwards to in ‘Back to the Future 2’. In recognition of that, equipment rental firm Hewden commissioned me to produce a report on what the world will look like in 2045, 30 years on from now. It considers construction technology as well as general changes in cities and buildings. The report is called 2045: Constructing the future and you can get a full copy from Here are a few of the highlights:

Report Highlights

High use of super-strong carbon-based materials, including ultra-high buildings such as spaceports up to 30km tall. Superlight materials will even enable decorative floating structures.


Greatly increased safety thanks to AI, robotics and total monitoring via drones

Half human, half machine workers will be common as exoskeletons allow workers to wear sophisticated hydraulic equipment.


Upskilled construction workers will enjoy better safety, better job satisfaction and better pay.

Augmented reality will be useful in construction and to allow cheap buildings to have elaborate appearance.

Smart makes buildings cheap – with tiny sensors, augmented reality, energy harvesting coatings, less wiring and no windows, buildings can become very cheap at the same time as becoming better.

The future of electronic cash and value


Picture first, I’m told people like to see pics in blogs. This one is from 1998; only the title has changed since.

future electronic cash

Every once in a while I have to go to a bank. This time it was my 5th attempt to pay off a chunk of my Santander Mortgage. I didn’t know all the account details for web transfer so went to the Santander branch. Fail – they only take cash and cheques. Cash and what??? So I tried via internet banking. Entire transaction details plus security entered, THEN Fail – I exceeded what Barclays allows for their fast transfers. Tried again with smaller amount and again all details and all security. Fail again, Santander can’t receive said transfers, try CHAPS. Tried CHAPS, said it was all fine, all hunkydory. Happy bunny. Double fail. It failed due to amount exceeding limit AND told me it had succeeded when it hadn’t. I then drove 12 miles to my Barclays branch who eventually managed to do it, I think (though I haven’t checked that it worked  yet).

It is 2015. Why the hell is it so hard for two world class banks to offer a service we should have been able to take for granted 20 years ago?

Today, I got tweeted about Ripple Labs and a nice blog that quote their founder sympathising with my experience above and trying to solve it, with some success:

Ripple seems good as far as it goes, which is summarised in the blog, but do read the full original:

Basically the Ripple protocol “provides the ability for humans to confirm financial transactions without a central operator,” says Larsen. “This is major.” Bitcoin was the first technology to successfully bypass banks and other authorities as transaction validators, he points out, “but our method is much cheaper and takes only seconds rather than minutes.” And that’s just for starters. For example, “It also leverages the enormous power of banks and other financial institutions.”

The power of the value web stems from replacing archaic back-end systems with all their cumbersome delays and unnecessary costs. 

That’s great, I wish them the best of success. It is always nice to see new systems that are more efficient than the old ones, but the idea is early 1990s. Lots of IT people looked at phone billing systems and realised they managed to do for a penny what banks did for 65 pennies at the time, and telco business cases were developed to replace the banks with pretty much what Ripple tries to do. Those were never developed for a variety of reasons, both business and regulatory, but the ideas were certainly understood and developed broadly at engineer level to include not only traditional cash forms but many that didn’t exist then and still don’t. Even Ripple can only process transactions that are equivalent to money such as traditional currencies, electronic cash forms like bitcoin, sea shells or air-miles.

That much is easy, but some forms require other tokens to have value, such as personalized tokens. Some value varies according to queue lengths, time of day, who is spending it to whom. Some needs to be assignable, so you can give money that can only be used to purchase certain things, and may have a whole basket of conditions attached. Money is also only one form of value, and many forms of value are volatile, only existing at certain times and places in certain conditions for certain transactors. Aesthetic cash? Play money? IOUs? Favours?These are  all a bit like cash but not necessarily tradable or exchangeable using simple digital transaction engines because they carry emotional weighting as well as financial value. In the care economy, which is now thankfully starting to develop and is finally reaching concept critical mass, emotional value will become immensely important and it will have some tradable forms, though much will not be tradable ever. We understood all that then, but are still awaiting proper implementation. Most new startups on the web are old ideas finally being implemented and Ripple is only a very partial implementation so far.

Here is one of my early blogs from 1998, using ideas we’d developed several years earlier that were no longer commercially sensitive – you’ll observe just how much banks have under-performed against what we expected of them, and what was entirely feasible using already known technology then:

Future of Money

 Ian Pearson, BT Labs, June 98

Already, people are buying things across the internet. Mostly, they hand over a credit card number, but some transactions already use electronic cash. The transactions are secure so the cash doesn’t go astray or disappear, nor can it easily be forged. In due course, using such cash will become an everyday occurrence for us all.

Also already, electronic cash based on smart cards has been trialled and found to work well. The BT form is called Mondex, but it is only one among several. These smart cards allow owners to ‘load’ the card with small amounts of money for use in transactions where small change would normally be used, paying bus fares, buying sweets etc. The cards are equivalent to a purse. But they can and eventually will allow much more. Of course, electronic cash doesn’t have to be held on a card. It can equally well be ‘stored’ in the network. Transactions then just require secure messaging across the network. Currently, the cost of this messaging makes it uneconomic for small transactions that the cards are aimed at, but in due course, this will become the more attractive option, especially since you no longer lose your cash when you lose the card.

When cash is digitised, it loses some of the restrictions of physical cash. Imagine a child has a cash card. Her parents can give her pocket money, dinner money, clothing allowance and so on. They can all be labelled separately, so that she can’t spend all her dinner money on chocolate. Electronic shopping can of course provide the information needed to enable the cash. She may have restrictions about how much of her pocket money she may spend on various items too. There is no reason why children couldn’t implement their own economies too, swapping tokens and IOUs. Of course, in the adult world this grows up into local exchange trading systems (LETS), where people exchange tokens too, a glorified babysitting circle. But these LETS don’t have to be just local, wider circles could be set up, even globally, to allow people to exchange services or information with each other.

Electronic cash can be versatile enough to allow for negotiable cash too. Credit may be exchanged just as cash and cash may be labelled with source. For instance, we may see celebrity cash, signed by the celebrity, worth more because they have used it. Cash may be labelled as tax paid, so those donations from cards to charities could automatically expand with the recovered tax. Alternatively, VAT could be recovered at point of sale.

With these advanced facilities, it becomes obvious that the cash needs to become better woven into taxation systems, as well as auditing and accounting systems. These functions can be much more streamlined as a result, with less human administration associated with money.

When ID verification is added to the transactions, we can guarantee who it is carrying out the transaction. We can then implement personal taxation, with people paying different amounts for the same goods. This would only work for certain types of purchase – for physical goods there would otherwise be a thriving black market.

But one of the best advantages of making cash digital is the seamlessness of international purchases. Even without common official currency, the electronic cash systems will become de facto international standards. This will reduce the currency exchange tax we currently pay to the banks every time we travel to a different country, which can add up to as much as 25% for an overnight visit. This is one of the justifications often cited for European monetary union, but it is happening anyway in global e-commerce.

Future of banks

 Banks will have to change dramatically from today’s traditional institutions if they want to survive in the networked world. They are currently introducing internet banking to try to keep customers, but the move to digital electronic cash, held perhaps by the customer or an independent third party, will mean that the cash can be quite separate from the transaction agent. Cash does not need to be stored in a bank if records in secured databases anywhere can be digitally signed and authenticated. The customer may hold it on his own computer, or in a cyberspace vault elsewhere. With digital signatures and high network security, advanced software will put the customer firmly in control with access to any facility or service anywhere.

In fact, no-one need hold cash at all, or even move it around. Cash is just bits today, already electronic records. In the future, it will be an increasingly blurred entity, mixing credit, reputation, information, and simply promises into exchangeable tokens. My salary may be just a digitally signed certificate from BT yielding control of a certain amount of credit, just another signature on a long list as the credit migrates round the economy. The ‘promise to pay the bearer’ just becomes a complex series of serial promises. Nothing particularly new here, just more of what we already have. Any corporation or reputable individual may easily capture the bank’s role of keeping track of the credit. It is just one service among many that may leave the bank.

As the world becomes increasingly networked, the customer could thus retain complete control of the cash and its use, and could buy banking services on a transaction by transaction basis. For instance, I could employ one company to hold my cash securely and prevent its loss or forgery, while renting the cash out to companies that want to borrow via another company, keeping the bulk of the revenue for myself. Another company might manage my account, arrange transfers etc, and deal with the taxation, auditing etc. I could probably get these done on my personal computer, but why have a dog and bark yourself.

The key is flexibility, none of these services need be fixed any more. Banks will not compete on overall package, but on every aspect of service. Worse still (for the banks), some of their competitors will be just freeware agents. The whole of the finance industry will fragment. The banks that survive will almost by definition be very adaptable. Services will continue and be added to, but not by the rigid structures of today. Surviving banks should be able to compete for a share of the future market as well as anyone. They certainly have a head start in many of the required skills, and have the advantage of customer lethargy when it comes to changing to potentially better suppliers. Many of their customers will still value tradition and will not wish to use the better and cheaper facilities available on the network. So as always, it looks like there will be a balance.

Firstly, with large numbers of customers moving to the network for their banking services, banks must either cater for this market or become a niche operator, perhaps specialising in tradition, human service and even nostalgia. Most banks however will adapt well to network existence and will either be entirely network based, or maintain a high street presence to complement their network presence.

High Street banking

 Facilities in high street banking will echo this real world/cyberspace nature. It must be possible to access network facilities from within the banks, probably including those of competitors. The high street bank may therefore be more like shops today, selling wares from many suppliers, but with a strongly placed own brand. There is of course a niche for banks with no services of their own at all who just provide access to services from other suppliers. All they offer in addition is a convenient and pleasant place to access them, with some human assistance as appropriate.

Traditional service may sometimes be pushed as a differentiator, and human service is bound to attract many customers too. In an increasingly machine dominated world, actually having the right kind of real people may be significant value add.

But many banks will be bursting with high technology either alongside or in place of people. Video terminals to access remote services, perhaps with translation to access foreign services. Biometric identification based on iris scan, fingerprints etc may be used to authenticate smart cards, passports or other legal documents before their use, or simply a means of registering securely onto the network. High quality printers and electronic security embedding would enable banks to offer additional facilities like personal bank notes, usable as cash.

Of course, banks can compete in any financial service. Because the management of financial affairs gives them a good picture of many customer’s habits and preferences, they will be able to use this information to sell customer lists, identify market niches for new businesses, and predict the likely success of customers proposing setting up businesses.

As they try to stretch their brands into new territories, one area they may be successful is in information banking. People may use banks as the publishers of the future. Already knowledge guilds are emerging. Ultimately, any piece of information from any source can be marketed at very low publishing and distribution cost, making previously unpublishable works viable. Many people have wanted to write, but have been unable to find publishers due to the high cost of getting to market in paper. A work may be sold on the network for just pennies, and achieve market success by selling many more copies than could have been achieved by the high priced paper alternative. The success of electronic encyclopedias and the demise of Encyclopedia Britannica is evidence of this. Banks could allow people to upload information onto the net, which they would then manage the resultant financial transactions. If there aren’t very many, the maximum loss to the bank is very small. Of course, electronic cash and micropayment technology mean that the bank is not necessary, but for many, it may smooth the road.

Virtual business centres

Their exposure to the detailed financial affairs of the community put banks in a privileged position in identifying potential markets. They could therefore act as co-ordinators for virtual companies and co-operatives. Building on the knowledge guilds, they could broker the skills of their many customers to existing virtual companies and link people together to address business needs not addressed by existing companies, or where existing companies are inadequate or inefficient. In this way, short-term contractors, who may dominate the employment community, can be efficiently utilised to everyone’s gain. The employees win by getting more lucrative work, their customers get more efficient services at lower cost, and the banks laugh to themselves.

Future of the stock market

 In the next 10 years, we will probably see a factor of 1000 in computer speed and memory capacity. In parallel with hardware development, there are numerous research forays into software techniques that might yield more factors of 10 in the execution speed for programs. Tasks that used to take a second will be reduced to a millisecond. As if this impact were not enough, software will very soon be able to make logical deductions from the flood of information on the internet, not just from Reuters or Bloomberg, but from anywhere. They will be able to assess the quality and integrity of the data, correlate it with other data, run models, and infer likely other events and make buy or sell recommendations. Much dealing will still be done automatically subject to human-imposed restrictions, and the speed and quality of this dealing could far exceed current capability.

Which brings problems…

Firstly, the speed of light is fast but finite. With these huge processing speeds, computers will be able to make decisions within microseconds of receiving information. Differences in distance from the information source become increasingly important. Being just 200m closer to the Bank of England makes one microsecond difference to the time of arrival of information on interest rates, the information, insignificant to a human, but of sufficient duration for a fast computer to but or sell before competitors even receive the information. As speeds increase further over following years, the significant distance drops. This effect will cause great unfairness according to geographic proximity to important sources. There are two obvious outcomes. Either there becomes a strong premium on being closest, with rises in property values nearby to key sources, or perhaps network operators could be asked to provide guaranteed simultaneous delivery of information. This is entirely technically feasible but would need regulation, otherwise users could simply use alternative networks.

Secondly, exactly simultaneous processing will cause problems. If many requests for transactions arrive at exactly the same moment, computers or networks have to give priority in some way. This is bound to be a source of contention. Also, simultaneous events can often cause malfunctions, as was demonstrated perfectly at the launch of Big Bang. Information waves caused by such events are a network phenomenon that could potentially crash networks.

Such a delay-sensitive system may dictate network technology. Direct transmission through the air by means of radio or infrared (optical wireless) would be faster than routing signals through fibres that take a more tortuous route, especially since the speed of light in fibre is only two third that in air.

Ultimately, there is a final solution if speed of computing increases so far that transmission delay is too big a problem. The processing engines could actually be shared, with all the deals and information processing taking place in a central computer, using massive parallelism. It would be possible to construct such a machine that treated each subscribing company fairly.

An interesting future side effect of all this is that the predicted flood of people into the countryside may be averted. Even though people can work from anywhere, their computers have to be geographically very close to the information centres, i.e. the City. Automated dealing has to live in the city, human based dealing can work from anywhere. If people and machines have to work together, perhaps they must both work in the City.

Consumer dealing

 The stock exchange long since stopped being a trading floor with scraps of paper and became a distributed computer environment – it effectively moved into cyberspace. The deals still take place, but in cyberspace. There are no virtual environments yet, but the other tools such as automated buying and selling already exist. These computers are becoming smarter and exist in cyberspace every bit the same as the people. As a result, there is more automated analysis, more easy visualisation and more computer assisted dealing. People will be able to see which shares are doing well, spot trends and act on their computer’s advice at a button push. Markets will grow for tools to profit from shares, whether they be dealing software, advice services or visualisation software.

However, as we see more people buying personal access to share dealing and software to determine best buys, or even to automatically buy or sell on certain clues, we will see some very negative behaviours. Firstly, traffic will be highly correlated if personal computers can all act on the same information at the same time. We will see information waves, and also enormous swings in share prices. Most private individuals will suffer because of this, while institutions and individuals with better software will benefit. This is because prices will rise and fall simply because of the correlated activity of the automated software and not because of any real effects related to the shares themselves. Institutions may have to limit private share transactions to control this problem, but can also make a lot of money from modelling the private software and thus determining in advance what the recommendations and actions will be, capitalising enormously on the resultant share movements, and indeed even stimulating them. Of course, if this problem is generally perceived by the share dealing public, the AI software will not take off so the problem will not arise. What is more likely is that such software will sell in limited quantities, causing the effects to be significant, but not destroying the markets.

A money making scam is thus apparent. A company need only write a piece of reasonably good AI share portfolio management software for it to capture a fraction of the available market. The company writing it will of course understand how it works and what the effects of a piece of information will be (which they will receive at the same time), and thus able to predict the buying or selling activity of the subscribers. If they were then to produce another service which makes recommendations, they would have even more notice of an effect and able to directly influence prices. They would then be in the position of the top market forecasters who know their advice will be self fulfilling. This is neither insider dealing nor fraud, and of course once the software captures a significant share, the quality of its advice would be very high, decoupling share performance from the real world. Only the last people to react would lose out, paying the most, or selling at least, as the price is restored to ‘correct’ by the stock exchange, and of course even this is predictable to a point. The fastest will profit most.

The most significant factor in this is the proportion of share dealing influenced by that companies software. The problem is that software markets tend to be dominated by just two or three companies, and the nature of this type of software is that their is strong positive reinforcement for the company with the biggest influence, which could quickly lead to a virtual monopoly. Also, it really doesn’t matter whether the software is on the visualisation tools or AI side. Each can have a predictability associated with it.

It is interesting to contemplate the effects this widespread automated dealing would have of the stock market. Black Monday is unlikely to happen again as a result of computer activity within the City, but it certainly looks like prices will occasionally become decoupled from actual value, and price swings will become more significant. Of course, much money can be made on predicting the swings or getting access to the software-critical information before someone else, so we may see a need for equalised delivery services. Without equalised delivery, assuming a continuum of time, those closest to the dealing point will be able to buy or sell quicker, and since the swings could be extremely rapid, this would be very important. Dealers would have to have price information immediately, and of course the finite speed of light does not permit this. If dealing time is quantified, i.e. share prices are updated at fixed intervals, the duration of the interval becomes all important, strongly affect the nature of the market, i.e. whether everyone in that interval pays the same or the first to act gain.

Also of interest is the possibility of agents acting on behalf of many people to negotiate amongst themselves to increase the price of a company’s shares, and then sell on a pre-negotiated time or signal.

Such automated  systems would also be potentially vulnerable to false information from people or agents hoping to capitalise on their correlated behaviour.

Legal problems are also likely. If I write, and sell to a company, a piece of AI based share dealing software which learns by itself how stock market fluctuations arise, and then commits a fraud such as insider dealing (I might not have explained the law, or the law may have changed since it was written), who would be liable?

 And ultimately

 Finally, the 60s sci-fi film, The Forbin Project, considered a world where two massively powerful computers were each assigned control of competing defence systems, each side hoping to gain the edge. After a brief period of cultural exchange, mutual education and negotiation between the machines, they both decided to co-operate rather than compete, and hold all mankind at nuclear gunpoint to prevent wars. In the City of the future, similar competition between massively intelligent supercomputers in share dealing may have equally interesting consequences. Will they all just agree a fixed price and see the market stagnate instantly, or could the system result in economic chaos with massive fluctuations. Perhaps we humans can’t predict how machines much smarter than us would behave. We may just have to wait and see.

End of original blog piece



The future of air

Time for a second alphabetic ‘The future of’ set. Air is a good starter.

Air is mostly a mixture of gases, mainly nitrogen and oxygen, but it also contains a lot of suspended dust, pollen and other particulates, flying creatures such as insects and birds, and of course bacteria and viruses. These days we also have a lot of radio waves, optical signals, and the cyber-content carried on them. Air isn’t as empty as it seems. But it is getting busier all the time.

Internet-of-things, location-based marketing data and other location-based services and exchanges will fill the air digitally with fixed and wandering data. I called that digital air when I wrote a full technical paper on it and I don’t intend to repeat it all now a decade later. Some of the ideas have made it into reality, many are still waiting for marketers and app writers to catch up.

The most significant recent addition is drones. There are already lots of them, in a wide range of sizes from insect size to aeroplane size. Some are toys, some airborne cameras for surveillance, aerial photography, monitoring and surveillance, and increasingly they are appearing for sports photography and tracking or other leisure pursuits. We will see a lot more of them in coming years. Drone-based delivery is being explored too, though I am skeptical of its likely success in domestic built up areas.

Personal swarms of follower drones will become common too. It’s already possible to have a drone follow you and keep you on video, mainly for sports uses, but as drones become smaller, you may one day have a small swarm of tiny drones around you, recording video from many angles, so you will be able to recreate events from any time in an entire 3D area around you, a 3D permasuperselfie. These could also be extremely useful for military and policing purposes, and it will make the decline of privacy terminal. Almost everything going on in public in a built up environment will be recorded, and a great deal of what happens elsewhere too.

We may see lots of virtual objects or creatures once augmented reality develops a bit more. Some computer games will merge with real world environments, so we’ll have aliens, zombies and various mythical creatures from any game populating our streets and skies. People may also use avatars that fly around like fairies or witches or aliens or mythical creatures, so they won’t all be AI entities, some will have direct human control. And then there are buildings that might also have virtual appearances and some of those might include parts of buildings that float around, or even some entire cities possibly like those buildings and city areas in the game Bioshock Infinite.

Further in the future, it is possible that physical structures might sometimes levitate, perhaps using magnets, or lighter than air construction materials such as graphene foam. Plasma may also be used as a building material one day, albeit far in the future.

I’m bored with air now. Time for B.

Ground up data is the next big data

This one sat in my draft folder since February, so I guess it’s time to finish it.

Big Data – I expect you’re as sick of hearing that term as I am. Gathering loads of data on everything you or your company or anything else you can access can detect, measure, record, then analyzing the hell out of it using data mining, an equally irritating term.

I long ago had a quick twitter exchange with John Hewitt, who suggested “What is sensing but the energy-constrained competition for transmission to memory, as memory is but that for expression?”. Neurons compete to see who gets listened too.  Yeah, but I am still not much wiser as to what sensing actually is. Maybe I need a brain upgrade. (It’s like magnets. I used to be able to calculate the magnetic field densities around complicated shaped objects – it was part of my first job in missile design – but even though I could do all the equations around EM theory, even general relativity, I still am no wiser how a magnetic field actually becomes a force on an object. I have an office littered with hundreds of neodymium magnets and I spend hours playing with them and I still don’t understand). I can read about neurons all day but I still don’t understand how a bunch of photons triggering a series of electro-chemical reactions results in me experiencing an image. How does the physical detection become a conscious experience?

Well, I wrote some while back that we could achieve a conscious computer within two years. It’s still two years because nobody has started using the right approach yet. I have to stress the ‘could’, because nobody actually intends to do it in that time frame, but I really believe some half-decent lab could if they tried.  (Putting that into perspective, Kurzweil and his gang at Google are looking at 2029.) That two years estimate relies heavily on evolutionary development, for me the preferred option when you don’t understand how something works, as is the case with consciousness. It is pretty easy to design conscious computers at a black box level. The devil is in the detail. I argued that you could make a conscious computer by using internally focused sensing to detect processes inside the brain, and using a sensor structure with a symmetrical feedback loop. Read it:

In a nutshell, if you can feel thoughts in the same way as you feel external stimuli, you’d be conscious. I think. The symmetrical feedback loop bit is just a small engineering insight.

The missing link in that is still the same one: how does sensing work? How do you feel?

At a superficial level, you point a sensor at something and it produces a signal in some sort of relationship to whatever it is meant to sense. We can do that bit. We understand that. Your ear produces signals according to the frequencies and amplitudes of incoming sound waves, a bit like a microphone. Just the same so far. However, it is by some undefined processes later that you consciously experience the sound. How? That is the hard problem in AI. It isn’t just me that doesn’t know the answer. ‘How does red feel?’ is a more commonly used variant of the same question.

When we solve that, we will replace big data as ‘the next big thing’. If we can make sensor systems that experience or feel something rather than just producing a signal, that’s valuable already. If those sensors pool their shared experience, another similar sensor system could experience that. Basic data quickly transmutes into experience, knowledge, understanding, insight and very quickly, value, lots of it. Artificial neural nets go some way to doing that, but they still lack consciousness. Simulated neural networks can’t even get beyond a pretty straightforward computation, putting all the inputs into an equation. The true sensing bit is missing. The complex adaptive analog neural nets in our brain clearly achieve something deeper than a man-made neural network.

Meanwhile, most current AI work barks up a tree in a different forest. IBM’s Watson will do great things; Google’s search engine AI will too. But they aren’t conscious and can’t be. They’re just complicated programs running on digital processors, with absolutely zero awareness of anything they are doing. Digital programs on digital computers will never achieve any awareness, no matter how fast the chips are.

However, back in the biological realm, nature manages just fine. So biomimetics offers a lot of hope. We know we didn’t get from a pool of algae to humans in one go. At some point, organisms started moving according to light, chemical gradients, heat, touch. That most basic process of sensing may have started out coupled to internal processes that caused movement without any consciousness. But if we can understand the analog processes (electrochemical, electronic, mechanical) that take the stimulus through to a response, and can replicate it using our electronic technology, we would already have actuator circuits, even if we don’t have any form of sensation or consciousness yet. A great deal of this science has been done already of course. The computational side of most chemical and physical processes can be emulated electronically by some means or another. Actuators will be a very valuable part of the cloud, but we already have the ability to make actuators by more conventional means, so doing it organically or biomimetically just adds more actuation techniques to the portfolio. Valuable but not a terribly important breakthrough.

Looking at the system a big further along the evolutionary timeline, where eyes start to develop, where the most primitive nervous systems and brains start, where higher level processing is obviously occurring and inputs are starting to become sensations, we should be able to what is changed or changing. It is the emergence of sensation we need to identify, even if the reaction is still an unconscious reflex. We don’t need to reverse engineer the human brain. Simple organisms are simpler to understand. Feeding the architectural insights we gain from studying those primitive systems into our guided evolution engines is likely to be far faster as a means to generating true machine consciousness and strong AI. That’s how we could develop consciousness in a couple of years rather than 15.

If we can make primitive sensing devices that work like those in primitive organisms, and can respond to specific sorts of sensory input, then that is a potential way of increasing the coverage of cloud sensing and even actuation. It would effectively be a highly distributed direct response system. With clever embedding of emergent phenomena techniques (such as cellular automata, flocking etc) , it could be a quite sophisticated way of responding to quite complex distributed inputs, avoiding some of the need for big data processing. If we can gather the outputs from these simple sensors and feed them into others, that will be an even better sort of biomimetic response system. That sort of direct experience of a situation is very different from a data mined result, especially if actuation capability is there too. The philosophical question as to whether that inclusion of that second bank of sensors makes the system in any way conscious remains, but it would certainly be very useful and valuable. The architecture we end up with via this approach may look like neurons, and could even be synthetic neurons, but that may be only one solution among many. Biology may have gone the neuron route but that doesn’t necessarily mean it is the only possibility. It may be that we could one day genetically modify bacteria to produce their own organic electronics to emulate the key processes needed to generate sensation, and to power them by consuming nutrients from their environment. I suggested smart yogurt based on this idea many years ago, and believe that it could achieve vast levels of intelligence.

Digitizing and collecting the signals from the system at each stage would generate lots of  data, and that may be used by programs to derive other kinds of results, or to relay the inputs to other analog sensory systems elsewhere. (It isn’t always necessary to digitize signals to transmit them, but it helps limit signal degradation and quickly becomes important if the signal is to travel far and is essential if it is to be recorded for later use or time shifting). However, I strongly suspect that most of the value in analog sensing and direct response is local, coupled to direct action or local processing and storage.

If we have these sorts of sensors liberally spread around, we’d create a truly smart environment, with local sensing and some basic intelligence able to relay sensation remotely to other banks of sensors elsewhere for further processing or even ultimately consciousness. The local sensors could be relatively dumb like nerve endings on our skin, feeding in  signals to a more connected virtual nervous system, or a bit smarter, like neural retinal cells, doing a lot of analog pre-processing before relaying them via ganglia cells, and maybe part of a virtual brain. If they are also capable of or connected to some sort of actuation, then we would be constructing a kind of virtual organism, with tendrils covering potentially the whole globe, and able to sense and interact with its environment in an intelligent way.

I use the term virtual not because the sensors wouldn’t be real, but because their electronic nature allows connectivity to many systems, overlapping, hierarchical or distinct. Any number of higher level systems could ‘experience’ them as part of its system, rather as if your fingers could be felt by the entire human population. Multiple higher level virtual organisms could share the same basic sensory/data inputs. That gives us a whole different kind of cloud sensing.

By doing processing locally, in the analog domain, and dealing with some of the response locally, a lot of traffic across the network is avoided and a lot of remote processing. Any post-processing that does occur can therefore add to a higher level of foundation. A nice side effect from avoiding all the extra transmission and processing is increased environmental friendliness.

So, we’d have a quite different sort of data network, collecting higher quality data, essentially doing by instinct what data mining does with huge server farms and armies of programmers. Cloudy, but much smarter than a straightforward sensor net.

… I think.

It isn’t without risk though. I had a phone discussion yesterday on the dangers of this kind of network. In brief, it’s dangerous.

Drones, balloons and high speed banking

High speed  or high frequency banking is a fact of life now and I am glad to say I predicted it and some of its associated issues in the mid 1990s. Technology has moved on rather though, so it’s long past time for an update.

Getting the distance between computing elements as small as possible has been one of the key factors in making chips faster, but the distances between chips and between computers are enormous by comparison. Now that trading computers execute many billions of instructions per second, even tiny extra transmission times can make a significant difference in the precise time at which data that will influence a trade instruction is received by a bank computer, and a consequent trade initiated. That can make a big difference in price and hence profits.

We are about to see the first exaflop computers. A light signal can only travel a third of a nanometre in free space in the time it take for an instruction to execute on such a machine.

Some data delivery to banks is synchronised to give a degree of fairness, but not all data is included in that, useful data doesn’t all come from a single source, and analyst software isn’t necessarily in the same location as a trading device, so signals holding data or instructions have to travel relatively large distances and that gives a degree of competitive advantage to those banks that pick the best locations and optimise their networks best. Sometimes important signals travel between cities or between buildings in a city. Banks already make free space optical links, send signals over laser beams through the air; point to point links with minimum distance. However, that isn’t feasible between cities. Very straight optical cables have also been laid to solve longer distance comms without incurring any extra delays due to bends.

But the trend won’t peak any time soon. Light travels faster in air than it does in fibre. 3 microseconds per kilometre is a lot faster than 5, so those banks with fibre links would be at a disadvantage compared to those with free space links. If the distance is too high to send a laser beam directly between buildings  due to atmospheric absorption, the earth’s curvature or air safety considerations, then there is another solution coming soon. Even sending free space light through the fibre ducts could be faster in latency terms than actually using the fibre, though the practicalities of doing so might well make it near impossible.

Balloons and drones are already being used or considered for many purposes and communications is just another one. Making a network of balloons or drones to divide the journey into manageable hops would speed signals along. There is a trade-off between altitude and distance. Going too high adds too much extra distance, though the air is clearer so fewer hops are needs and the speed of light very slightly faster. There will be an optimum curve that takes the signals reasonably high for most of the journey, but that keeps the total distance low. Drones and balloons can stay afloat for long periods.

It doesn’t stop with just comm-links. Given that there are preferred locations for different industries as far as data sources go, we may well see aerial computing too, doing the processing in situ and relaying a trade instruction to minimise the total time involved. Regulation lags such ideas so that enables the faster more agile banks to use high altitude balloons or drones for long periods before legal challenges force their removal. Even then, using helicopters and planes, hiring office building rooftops and many other strategies will enable banks to shave microseconds or even milliseconds off the time they need to analyse data and instruct trades.

High frequency trading has already introduced instabilities into trading systems and these new potentials will increase instability further still. The extra mathematical and business complexity of using divers parallel networks introduces new kinds of wave interference and emergent behavioural risks that will be as hard to spot as the financial derivative risks that caused the last crash.

While risks are underwritten by taxpayers and banks can keep the rewards, they have little incentive to play safe and every incentive to gamble more and faster, using every new gearing technology they can source. Future crashes could be even more spectacular, and may happen order of magnitude faster than the last big crash.

I spotted some other new banking toys, but they are even more dangerous and I will save those for another blog.



San Francisco is the front line of capitalism reform, begging the question: who owns the city?

I watched on the news tonight how people who have lived in San Francisco for decades are being evicted from their homes by landlords eager to cash in on the rich rents they can charge to incoming techie types on large salaries from the tech giants.

The news program showed the hippie generation blockading the luxury buses taking people to work at Google. Google pays well to get high quality intellect. There is nothing wrong with that. Those employees have lots of cash but they still need accommodation, so the poor are kicked out of their rented accommodation because they can no longer afford the rents. So it finds itself at war with the longer term residents who made the city what it is, the reason Google wants to be there. 

A simple question sums up the whole problem. Who owns San Francisco? Answering that isn’t simple and leads directly to how we must change capitalism if it is to survive, and since we must, we eventually will. The gentle protests of the weak and disenfranchised in San Francisco will once again put that hippy generation at the front line of change.

I am no expert on San Francisco. I went to Menlo Park once to give a talk, then left, spending less than a day there in total. I’ve seen it many times on TV and the media of course. It is famed for the hippies, Alcatraz, being a gay hub, being the focus of west coast IT development, and a few movies. Some other things happen there, but these are the things it is mainly known for.

A city is lots of things. It is the land, with some buildings and infrastructure on top, and some resources below. Some is owned collectively, some by individuals or companies. Those are very important, but they are only a fraction of what a city is. It is also the people – the activities that go on there, the culture, the customs, the ideologies, the intellectual activities, the business, the entertainment, and it is also a brand – when someone thinks of San Francisco, a bunch of associations appears in their minds, just like any commercial brand, making it very different from London or New York or LA. It is also the geography –  the location, the climate, the risks of quakes. And it is also the history, the accumulated associations over decades.

When a property developer buys a building somewhere, they may add to  its physical value by renovating it, decorating it, extending it, or adding some nice furnishing. But any property developer has a choice of where to buy, and chooses an area they think will increase in value. The increase in value comes from all the other intangibles I just mentioned, (mostly what economists call social capital, but I don’t like using jargon where ordinary words do perfectly well) so the underlying question is: why should all the value increase go to the developer. In essence they are getting all the efforts and talents of everyone else, all the magnetism they create, for free. Why? Why should they get it all? Why should the person living in the flat not get it? It is they who are the magnet. You can get a flat anywhere. The reason you want that one is because of where it is. Does that value-add not belong to everyone who made that place the place to be?

Look at it another way. Suppose it’s the 1960s. You are a hippie and you want to go where it is happening. Suppose all the hippies had a flash of insight and realised what would happen 50 years later. Suppose they all decided to build their own town next door. Suppose they decided that capital isn’t everything, and decreed that the value of each property there would be split. Part would be the physical property and that would increase in value at the construction industry inflation rate. The other part of the property value would be the cultural value, and that would increase to whatever the market stands. The property developer would get a fair ongoing rent for that class of property. The community would get the remuneration for the value they have added. Each year a market valuation would show how much property has increased in value, how much value of new business has been generated because of the local atmosphere. The people who lived there the last year would get a share of that. A hippie moving into the area wouldn’t go to San Francisco, that sterile could-be-anywhere town with no culture. They’d go to the really cool trendy town next door where everyone wants to be and property costs a fortune. But as they live there, as they contribute to the area’s atmosphere, so they too get a ‘citizen wage’, their share of the value add. That offsets the rent they pay the next year.

If they did that, the rewards would go to those who create them. Isn’t that the way it should be? Why should someone get all the rewards just because they provided some cash up front, but perhaps did nothing more to contribute? Why should the property owner also be the assumed owner of the value the community has added to the area? Why is capital more important than investment of time, energy, emotion, and love?

The hippies didn’t do that, neither did the gay community. Now the enormous value they all added to San Francisco is all going to the property developers, 100% of it, even though all they did was own the flats. In gratitude, they are now evicting those contributors to make way for others whose sole advantage is having more cash to offer. That is capitalism. Well, if that is so, capitalism needs to change.

We are watching economics evolve worldwide. In most developed countries, automation is concentrating wealth with the company owners. Buy 100 machines and employ no staff, keep all the proceeds to yourself, and get rich. It looks very different, but actually it is the same. The provision of the capital is assumed to be the only part that matters. The access to a market, the development of all the infrastructure, the culture in which the product will be used, the political stability, the banking system, the accumulated human knowledge that went into every aspect of the product, every other aspect of the modern world that makes the product possible, and makes it possible to sell – all of that is assumed to be of no value and receives none of the proceeds other than the same tax rate that a company would pay if it contributed heavily to culture and society and employed thousands of employees. If it were given an agreed value, that could become a part ownership of the company, proceeds allocated to the capital providers and the silent partner culture capital provider.

Capitalism worked well when the immaturity of technology meant that about half of the wealth generated went to employees and half to the owner. You could get very rich, but others still had enough income to buy your products, and it all kept working. If we automated every job and a few people own all the machines, nobody else could afford to buy and capitalism would grind quickly to a halt. We aren’t there yet, but somewhere like that is the ultimate destination if we don’t start adjusting it. Even those wealthy young programmers could be automated by an advanced AI.

So we need to adjust capitalism. Working out some way of valuing the entire cultural contribution of a society or region so it can stand side by side with the provision of capital would be a good start. Then some sort of culture tax can distribute wealth between the factory owners and those who own the culture in which it exists, i.e. all of us.

Capitalism is a good idea, one that has served America and the free world very well. It doesn’t need thrown away, just adjusted a bit. We need to look at it afresh and realize that capitalism isn’t the same as materialism. Just because something isn’t physical doesn’t mean it has no value. Surely we already understand that with all the media we consume? All we need to do is extend that understanding a bit further, to the other intangibles. Everyone contributes to the character of a city, from the mayor down to the bum on the street with a begging bowl.

So looking at San Francisco and the bus demos, it seems that the nouveau riche of the internet generation are only rich because of the inability of capitalism itself to keep up. Google is only wealthy because the rest of the market is slower to evolve, even most of the IT industry. They can only make money at all because the internet hasn’t evolved fast enough and much of the original dream is yet to be realized. It it had kept up, the perfect market would have no need for ads and they’d have little income.

San Francisco beautifully illustrates the clash of the permanent and the transient, the old and the new, the material and the emotional. Its done it a few times before, and it may again now.

If Gibbon were alive today, he wouldn’t be writing about the rise and fall of the Roman Empire. He’d be writing about San Francisco and the decline and fall of overly simplistic capitalism. I’m no Gibbon, but I hope I managed to explain my point.

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!