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broadstuff"broadstuff" - 5 new articles

  1. Machine Age automation kills jobs & wages shocker
  2. Where have all the Gurus gone?
  3. Email as the Lingua Franca of the Digital Babel
  4. The Distraction Economy
  5. Google - it ends not with a bang, but with regulation
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  8. Prior Mailing Archive

Machine Age automation kills jobs & wages shocker

Andrew McAfee in the FT explaining to the FT audience what has long been blindingly obvious to most everyone else who is living through it - if you automate away the high value jobs and all thats left is low value low skill jobs, average wages and living standards fall, and inequality rises.

He uses the though experiment of a 2 industry economy, one with hi tech, high wage manufacturing and low tech, low wage dog grooming. Over time the high tech labour gets displaced by automation and more people become dog groomers, so average wages in the population fall, those left in manufacturing get richer, inequality widens etc etc. He then observes, as if its a massive revelation, that:

This example is obviously trivial and contrived, but it does include some trends that we see in the actual economy — lots of jobs growth in the low-productivity service sector, sluggish overall demand growth and lots of automation in manufacturing. It also helps explain why corporate profits are so high these days: the factories, after all, have maintained their revenues while halving their payrolls.

As a result of calculations like these I’m a bit less perplexed about the current productivity growth numbers, and a bit more convinced that lousy productivity growth is entirely compatible with strong tech progress. All it takes is an economic environment much like the one we have at present.

No shit, Sherlock!

I guess what's really sad is you probably do have to use a 2 industry model-as-parable to explain it to FT reading, degree educated, often economist types. Piketty tried it the big data way but to little impact. They analyse the trees to death, but all too often cannot see the woods.

Now, why not do a little sociohistorical analysis too, and look at what happens when unemployment and wages fall and inequality rises, and a large section of a population is discontented and feels it has no future. Guess what - the economic environment stops being like the one we have at present.

Here's a hint - start with France, 1789, and continue reading about "transformational change", mob revolt style ....the Deus is ex the Machine Age.
    

Where have all the Gurus gone?

Article from The Economist echoes something I've been thinking increasingly - there's not a lot of new stuff coming out of guruland these days. I thought it was just me getting old and cynical, as increasingly everything "New" just seemed to be a rehash of something from 2 decades ago or more. I had started assumed New Gurus (Gurii?) were mining old, out of print books and rehashing old whines into new booklets.

The Economist has noticed the same, and is looking for reasons why - they think that:

What explains such lethargy in a supposedly lethargy-busting industry? The main problem is that the guru business is reaching the end of a long cycle of creativity. For the past two decades or so it has been driven by two seismic economic changes—the rise of the emerging world and the digital revolution.

- The first change led to the ascent of a remarkable group of Indian management theorists, most notably C.K. Prahalad (who died in 2010). They focused on subjects such as the buying power of developing-country consumers, the virtues of frugal products, and the difficulties of doing business in places with poor infrastructure and weak institutions.

- The digital revolution produced a new class of digital gurus, such as Mr Tapscott (Long Tail). And Mr Christensen’s idea of Disruptive Innovation :

Ah, so its a generational fin-de-siecle then.The Economist also argues that its becoming harder to mint new Gurus now as (i) the world is more interested in Big Data than Big Ideas, and (ii) there are a million Mini-Gurus blooming in the blogosphere. Also companies are increasingly trying to be their own Thought Leader.

To sum up, they note that the Guru industry itself is not exactly behaving like one of these fast moving, always changing, disruptive modern industries that the Gurus bang on about:

...considering the resources that are devoted to thinking about management, it is remarkable how much virgin territory remains. There are still no Chinese management gurus to challenge the leadership of the ageing Indian establishment. There are still no serious books on what the internet economy means for the boundaries of the firm or markets for talent. The guru industry seems ripe for disruptive innovation.

Well, quite.

I did read a study several years back, some Swedish researchers looked at what makes a Guru - and one of their major conclusions was that a Guru is selected and anointed by kingmakers, just being smart and original isn't enough. In the old days these kingmakers were usually publishing houses who would then market the cr*p out of said Guru's tome/s . But, as with the music industry, that media model is largely gone - there just isn't the ROI to hugely promote modern Gurus. There is an analogy with the Music industry, where being an original talent also was never enough, the game was always about getting the A&R - and so the oldies in Guruland and Musicland keep a high mindshare as the total cumulative spend on their PR dwarfs the trifling modern amounts spent so the Old Guard have the bg billings, the best new talent gets as far as it can without the Old Skool PR $ into specific verticals, and the Long Tail's output is largely irrelelevant (or gets mined by the better known).
    

Email as the Lingua Franca of the Digital Babel

Do you remember all the predictions that "email will die" and that social tools will replace it with "ambient intimacy" or similar?

Turns out that not only is it very unlikely email will ever die (see my argument re Riepl's Law on that score) but is also highly likely to grow, not shrink.

The reason for this is due to

(i) The sheer volume of comms on the new systems has just reproduced email's problem - ANY system, email included, is effective when the volume of messages is manageable, and overload looks the same on all of them. Except email has better timestamping, search and storage as its been around longer.

(ii) But email as the new killer app is die to the proliferation of all the social tools delivering said Ambient Intimacy, and thus fragmentation of the medium. There are now so many of them, that the Ambience is broken up into a veritable Tower of Babel of different protocols. The requirement is increasingly for one system to find them, rule them all, and in the darkness (of the communications server farm) bind them.

And guess which system is the most ubiquitous, flexible, integrateable, multi-capable to do this?

Yes...it's email.

So that inbox of yours that overfloweth - the net effect of all these new social tools will just be to make it worse.

You heard it here first...

(by the way, you can subscribe to get Broadstuff via email....)


    

The Distraction Economy

Everywhere you turn there is this focus on the "Attention Economy", defined by Wikipedia as follows:

..content has grown increasingly abundant and immediately available, attention becomes the limiting factor in the consumption of information. Attention economics applies insights from other areas of economic theory to enable content consumers, producers, and intermediaries to better mediate and manage the flow of information in light of the scarcity of consumer attention


Which is all very well, but what has really occurred is an arms race between various service providers to divert your attention to their new new thing, rather than any others, and certainly not to the (slightly dull) thing you probably really should be doing.

I call this the Distraction Economy, and its really an anti-economic effect as:

- many (most) of the products of the "attention economy" accrete very litle value to the user, most of the value goes to the provider. Whether its your content, attention or personal / activity data
- in their attempts to grab attention, recruitment techniques are starting to resemble "addictification" rather than "gamification" or UE-ification.
- they are value destructive to you - removing attention from added value tasks you should be doing has a double whammy - not only are you doing less of the staff that adds value to you, that time is used less effectively

Taking these in turn:

Accrete no or very little Value

There is an infinite array of diversions seeking to distract you. The internet is always wrong, there is always one more interesting tweet-link to read, one more comment for someone's Facebook wall, one more go on the game du jour. And what are you losing - they are all free, right? Well that is the billion dollar question. What is the value of your time spent on these distraction? There are two ways of measuring this:

(i) The net present value of your future spend - now that's a high value number, and that's what the service provider is getting from you. Trouble is, they aren't paying you - they are giving it to their real customer, the advertisers and people who use your data (hint - a Customer is someone who gives them money, a User is someone who creates value for them for free)

(ii) The opportunity cost of your time - what are you getting for doing this vs doing something else (like your job, for example). The formula for the value of a follower of yours is typically written as some form of:
Total no. of followers (potential) x Total no. of events (actual ctivity - likes, twts etc) x Conversion rate (how many saw/give a sh*t about what you did) x Conversion Value (real dollars you get from that interaction).

Problem is that, for the average joe (or josephine) in the New Digital Economy the Conversion Value is near zero, as is the Conversion Rate, so this is an essentially zero-value accretion. So the +ve value is near zero

However, there is a negative opportunity cost - chances are most distractions reduce your own time and effectiveness actually spent on valuable tasks - i.e. unless you have zero valuable tasks to do, paying attention to the "attention economy"'s products is going to cost you (see part 3 below)

Addictification

First came the idea of the Great User Experience, then when that arms race was tailing off came Gamification, now that is reaching its limits there is Addictification - the best and brightest minds of a generation are being used to try and ensure that people will pay attention to non essentials. Neuroscience, behavioural science, mathematics and a fistfull of 'ologies are being used to try and make this or that piece of digital bubblegum register in people's attention-span and grab that 15 minutes of fame.

Value Destructive

As noted above, time being diverted is very unlikely to be accretive in itself, and is highly likely value destructive as:

(i) Less time being spent on valuable tasks - that has to have an opportunity cost impact in the medium and long term

(ii) It has been shown, in study after study, that distracting yourself from a task reduces your efficiency in performing that task, plus also imposes a "setup" and "teardown" time penalty as your brain switches over from task A to task B. The worrying thin about the distraction economy is that it feels like you are more effective, when in fact the hard metrics show the opposite.

What's the answer?

Firstly, it is to recognise that most of the bright shiny products of the "attention economy" are not there to make you money, they are there to make money out of you.

Secondly, to recognise there is an entire industry out there trying to make these grab your attention, with a miniscule industry building antidotes.

So the only real solution is to time-limit the channels - turn off ambient alerts, make a time to do emails/twitter/facebook etc, and keep to it.
    

Google - it ends not with a bang, but with regulation

TS Eliot wrote that the world ends not with a bang, but a whimper. It is our observation that the worlds of most monopolies effectively end with regulation of some sort or other, either breaking them up , forcing access, or regulating away super-profits (or some combination). And now, after several years of rumblings, the EU has finally started to look at Google. Today Margrethe Vestager, the European Union competition commissioner, announced an investigation into Google's practices for favouring its own shopping sites in guiding searches - NYT:

The abuse charge focused on accusations that Google diverts traffic from its rivals to favor its own products and services, particularly websites for shopping. That led the European Commission to issue a set of formal charges, known as a statement of objections.

A large number of online operators have complained about Google in other areas, like travel and mapping. Ms. Vestager said that the inquiry might eventually expand beyond shopping sites.

Google has been accused of these things for quite a few years, and there have been rumblings of EU action for some time so the only question in our minds is "why now". The NYT notes that:

“The decision by the commission to position itself as the lead competition authority for the digital age may trigger anger among some U.S. politicians

It also allows the EU, currently embattled by internal accusations of being sclerotic, unrepresentative, comatose etc etc to actually look like it is taking a lead in Doing Something in an area of considerable concern to EU technology firms.

The EU is also considering looking at Google's practice with Android:

The European Commission also said on Wednesday that it was stepping up a separate investigation into whether phone makers that agree to use Android — and that also want Google applications like YouTube — face contractual requirements to place those applications and other Google-branded applications in prominent positions on a mobile device.

“Smartphones, tablets and similar devices play an increasing role in many people’s daily lives,” Ms. Vestager said, “and I want to make sure the markets in this area can flourish without anticompetitive constraints imposed by any company.”

If these are proven true, it will be clear that Google, a noisy advocate of net netrality on others' platforms, does not practice net neutrality on it's own.

Throubles usually come in threes, they say - any bets on an EU investigation into tax avoidance practices by US multinationals in Europe soon?
    

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