What's Next: Issue 20
Society & culture
Thinking About Thinking
One argument about artificial intelligence that is rarely heard is the idea that instead of machines becoming smarter perhaps what will happen is that people will become more stupid, thereby making machines more intelligent by default. Some people are wondering whether this isn’t happening already. For example, have you noticed how attention spans are shortening? Perhaps you are starting to scan articles that you would have once read in their entirety. Or maybe you get fidgety and look for something else to do after reading a few chapters of a book. Indeed, if this weren’t short and written in the tight style of advertising copy would you still be reading it?Something certainly seems to be happening to how we read (and thus, one assumes, how we think), but what is it and why is it happening?The ‘what’ is uncertain but the ‘why’ seems fairly clear.
The Internet (and search engines in particular) is encouraging us to consume information and knowledge in short, snacked-sized bites. Our constant partial attention means that we skip or bounce from one source or site to another. Convenience, speed and immediacy are everything and the end result is that we are in danger of losing the ability to concentrate, contemplate or reflect. Thus we are shifting from an age where information is power to one where retaining someone’s attention is. Information overload, together with a culture of instant digital gratification, is also making us intellectually impotent. Our attention is being scattered far and wide and deep thought, analysis and memory are being diffused.
This is not necessarily a problem. It used to be thought that the adult mind was fixed but recent research suggests quite the opposite. The brain is ‘plastic’ and responds to external stimulus even when it’s fully grown. In other words, the brain reprograms itself according to external stimuli and experience. Thus, while the brain is nothing like a computer it could be that computers are now making it so. We are re-programming the human mind to behave like a machine. This idea is not new.Similar arguments were made when Guttenberg invented the printing press and anxiety has always surrounded how technology affects human thought all the way back to Socrates. Moreover, research that would once have taken days now takes minutes and we have access to information from around the world in an instant. We can also forget trivial information because this can be accessed again in seconds. Nevertheless, the nagging doubt remains that while machines are becoming more emotionally aware and intelligent we are slowly turning into machines, devoid of memory, emotion or empathy.
Ref: The Atlantic (US) July/August 2008, ‘Is Google Making Us Stupid?”
N. Carr. www.theatlantic.com
Source integrity: *****
Search words: Google, search, intelligence, stupidity, machines, thinking
Trend tags: Intelligence, search
Why is Anger All the Rage?
Why is everyone so angry all of a sudden? Why is grim survivalism the current zeitgeist? To quote a leader in the Financial Times, it might be that “The ‘nice’ decade – for non-inflationary continuous expansion – may be behind us”. In other words we are entering a nasty period where economic anxiety is becoming a catalyst for all kinds of attitudinal and behavioural shifts. For example, the real issue might not be peoples’ anger per se but the increasing number of people and events that provoke this anger. This can range from traffic jams and bad customer service to falling house prices, increasing food and energy costs and the economic rise of China. If the economy really turns sour people in places like London and New York will therefore soon be screaming for protection from the likes of Dubai and Moscow. In other words, economic issues will bring nationalist attitudes to the fore much in the same way that racism and patriotism grew in the wake of the 1930s depression. You can see this anger already in the form of ‘Wrath Lit’ on the shelves of your local bookstore. But is the world really getting more angry or is it simply that the likes of camera phones and YouTube are making more of us aware of incidences of anger?
Put slightly differently, the way to create an epidemic of something like anger is simply to use the word in politics or the media. Another explanation for the rage trend is that in many societies anger is a badge of honour. It is seen as a virtue. It is the individual being true to themselves and expressing their feelings. Well bottle it up buddy because you are making the rest of us anxious.
In closing it is probably worth mentioning Elizabeth Kuber-Ross’s five point model of how people deal with death. Stage 1 is disbelief, stage 2 is yearning, stage 3 is anger, stage 4 is depression and stage 5 is acceptance. Is it possible that societally (in the West) we are looking at what we think is an abyss (i.e. economic recession, global warming, the rise of China and so on) and are reacting in exactly the same way as if we were facing terminal illness or the death of a loved one. We are currently in the collective anger stage, falling into depression. But soon we will adjust and accept whatever the new normality is.
Ref: Various including: The Financial Times (UK) 19-20 July 2008, ‘Live life with a flourish’ H. Eyres. www.ft.com, UTNE Daily (US) November-December 2007, ‘All the rage’, A. Santella. www.utne.com , New York Times (US) 20 November, 2007, ‘Denial makes the world go round’, B. Carey. www.nytimes.com , South China Morning Post (China) 30 July 2007, ‘Distrust dominates in this inquisitional age’, J. Hoagland. See also Williams Inference on Anger (Thanks John).
Source integrity: *****
Search words: Anger, rage, mood
Trend tags: Anxiety
Drowning in Shallow Waters
In his 1955 book entitled The Sane Society, the author Erich Fromm predicted that man would move from being a robotic, all-consuming creature that was “well-fed, well-entertained…passive, unalive and lacking in feeling” towards“humanistic communitarianism”. Similarly, Maslow foresaw a world where humans naturally switched their attention towards intellectual, spiritual and existential questions and pursuits once lower level needs such as food and security had been achieved. Intellectual activity and spiritualism are flourishing in some parts of the globe these days but triviality, superficiality, vanity, passivity and indifference are generally stronger drivers of behaviour. So has Maslow’s Pyramid of needs collapsed or is it just that the sandstorm of materialism has temporarily obscured the view of various looming emergencies?
Part of the problem is that we have somehow conspired to allow politicians and others to turn us into the consumers of various products and services. Hence keeping the customer satisfied is the name of the game and denial and confusion are the chosen weapons of mass distraction. Scepticism and enquiry are thus brushed off to the edges of society allowing the mass of humanity to wallow in shallow waters. Some writers saw this coming a long time ago. In a 1957 essay called A Theory of Mass Culture, Dwight MacDonald argued that a “trivial culture that voids both the deep realities and also the simple spontaneous pleasures” would take hold whereby anything of substance would be repackaged to be either non-threatening, entertaining or ideally both.So is it all doom and gloom? I think not.It could be that what appear to be looming emergencies will turn out to be less of a problem than we think. Or perhaps we are naturally lazy and we are leaving our historical inventiveness to the very last moment. Perhaps the last word should be given to Carl Rogers who, in 1961, wrote, “when I look at the world I am a pessimist but when I look at people I am optimistic”. I couldn’t agree more.
Ref: Sydney Morning Herald (Aus) 19-20 July 2008, ‘Triumph of triviality’, J. Schumaker. www.smh.com.au
Source integrity: ***
Search words: materialism, triviality, culture
Trend tags: meaning
In Cyberspace Everyone Can Hear You Scream
You’ve probably about Heather Mills, the ex Mrs Paul McCartney. But the real story in the Heather Mills case isn't about her allegedly sordid past, it's about the future of digital gossip and, in particular, how different generations view privacy. No form of digital communication or exchange is safe these days. In other words, privacy in our digital and hyper-connected age is dead. Generation Y knows this and doesn't seem to care. Generation X is either blissfully unaware or horrified. The problem, of course, is that in Cyberspace nothing dies, so if you upload something there is no guarantee that you will ever be able to get it back. It could be cut and pasted and appear on countless other websites and there is absolutely nothing you can do about it. Equally, while you might deactivate an account on a social networking site, there is no guarantee that personal information will be removed from the website's servers. So if, as a 19-year-old, you appear in a rather explicit amateur video it could stay up forever for prospective marriage partners or future employers to see. So far, legal cases concerning privacy online are almost unheard of but it's surely only a matter of time.
It's a tangled world wide web we are weaving. Maybe this bothers you. Maybe it doesn't. Your attitude towards privacy will probably depend on how old you are. If you are aged 40-plus you probably cringe at the thought of allowing the world to peer past your net curtains and into your life.But if you're younger you quite possibly can't see what the problem is. At its worst the Internet is mob justice on steroids. And don’t expect the law to help either. For example, in the US section 230 of the 1996 Communications Decency Act specifically states that Internet Service Providers are blameless when it comes to spreading untruth or invading personal privacy. Contrast this with how liable they are for breaches of copyright. The Internet has removed many of the factors that limit our behavior offline so presumably as the internet and virtual life become more pervasive societal norms will shift.
This could in turn give rise to the emergence of technology refuseniks. In most cases these will be older people "unplugging" as a way of dealing with privacy concerns or information overload but many younger people will also move "off network" because the social pressure to be always online or collect digital friends will create a kind of Facebook fatigue or malaise. Similarly, people will use multiple online personas to protect their identity and reputation online. The good news is that all this digital connectivity should make individuals and institutions more transparent and honest but it will also mean much less privacy.
Ref: The Financial Times (UK) 13 June 2008, 'Cyberspace gossip is forever’, C. Caldwell. www.ft.com Also The Herald Sun (Aus) 30 March 2008, ‘Only Privacy Dies in Cyberspace’ R. Watson. www.heraldsun.com.au
Source integrity: *****
Search words: Privacy, social networks, celebrity
Trend tags: Digitalisation, connectivity
Is Second Life Affecting Behaviour in Real Life?
Over at Stamford University there is a wonderful thing called the Virtual Human Interaction Laboratory (VHIL) run by Assistant Professor Jeremy Bailenson that studies how self-perception affects human behaviour. Specifically the lab studies how online activities influence real life. One of the lab’s key findings is that some of the key principles that apply in real life work in virtual worlds too and there is a significant ‘bleed’ between virtual experiences and real life attitudes and behaviour. For example, if you become increasingly confident in a virtual world this confidence spills over into the real world and vice versa. Does this matter? Almost certainly. 13 million people have visited Second Life and there are generally just short of 450,000 resident online in a typical week. Even bigger is World of Warcraft, which attracts 10 million active ‘users’, many of whom spend at least 20 hours each week inside the virtual world. Moreover, as these worlds become ever more lifelike through the addition of further sensory capabilities these virtual experiences will be experienced by more people and will thus become more influential.
Ref: Time (US) 12 May 2008, ‘How Second Life Affects Real Life’, K. Dell. www.time.com
Source integrity: ****
Search words: Second life, cyberspace,real life
Trend tags: Virtualisation
The Future of Oil
In 1973 an oil crisis almost brought the western world to its knees. The problem was a supply issue caused by an OPEC embargo and the result was a 400% increase in the price of oil. This time around the price has gone up by 400% again (from under $30 a barrel in 2001 to over $130 in 2008) but this time it’s been caused by rising demand from countries like China. But why exactly is oil so expensive and what’s going to happen next? The cost of oil has certainly led politicians and the media in search of scapegoats. These range from speculators to profiteering oil companies, both of which are demonstrably untrue. Moreover, the claim that oil is costly because it has almost run out (the extreme peak oil scenario) is also rather far fetched. The problem currently isn’t a lack of oil; it’s a lack of refining and transport capacity. So will the price of oil go down in the future? In the short term the answer is possibly down, but longer term the price will keep rising until energy efficiency measures take hold in the West or demand is cut back in the East. Actually oil consumption has already started to fall in rich nations (it’s fallen for two years in a row and in ‘07 the growth in consumption was around 25% of what it was in ‘04).
Of course there are renewables but wave and wind power are never going power the global economy in my opinion. Solar technologies are looking good, especially if you add a shot of nanotechnology, and biofuels could be interesting too. However, these technologies are all years away in any meaningful sense so in the meantime oil, coal and nuclear will be what will power the future over the next twenty of thirty years. Ironically, of course, the rising price of oil will eventually reduce demand, which has happened before albeit in a slightly different way. In the 1700s Britain suffered from "peak wood". Land was being deforested for agriculture, and a growing urban population was putting pressure on the fuel supply.
One can imagine that the doom merchants of the day thought they were in terrible trouble. It was a wood-based economy, after all. But the rising price of wood eventually led to the emergence of new fuels and the doom merchants were soon replaced with coal merchants.
It's also worth remembering that in the first half of the 19th century, people used sperm whale oil for lighting, and in 1820 it cost $200 a barrel in today's money, so we have been here before.
Ref: The Economist (UK) 31 May 2008, 'Double, double, oil and trouble’, ‘Recoil’, ‘Pistol pointed at the heart’ and ‘Crude Measures’. www.economist.com
Source integrity: *****
Search words: Oil, energy, peak oil, 1973
Trend tags: Resource shortages, sustainability
Tween Trends
What do children want? The answer is what everyone else wants – to be loved, to be acknowledged, and, up to a point, to belong. In the case of Tweens (kids that are almost but not quite Teens) the list also includes being rich and to be famous.
One survey, by KidshopBiz(a US youth marketing firm) found that 45% of Tweens wanted to be famous, while a British survey found that 80% of 12-year-olds wanted to be rich. Even with kids that don’t want to be rich and famous there seems to be a fascination with people that are. Part of the reason for this could be the fact that the media is obsessed with these themes but it’s also probably because in an age of web 2.0 it is much easier than it used to be to become well known. Age is also less of a barrier to business success than it used to be (look at the founders of YouTube, Google et al). However, whilst the current generation of kids has more choice and material possessions than ever before their amount of experience is probably narrowing. They are organised and scheduled. Paranoid, success driven parents rarely let them out of their sight for more than a few seconds.
Parents are also around less than they used to be and this means that kids are less socialised than before. According to Professor Richard Layard at the London School of Economics “Young people live in a world with very little meaningful contact with adults” The result is a generation of anxious and remarkably unhappy kids that worry about what they look like and whether or not they’ll fail whatever that means. Moreover, underneath the superficial sophistication and worldliness lies an inner unease and insecurity, which is possibly why substance abuse, violence and self-harm are increasing. Then there is the issue of technology and in particular the affects of being constantly connected to peers and never being allowed to just quietly be themselves. Our current culture is fundamentally driven by technology and this means that everything needs to be fast and new. Technology is thus a means to an end but what we have forgotten to ask ourselves is what is the end that we are rushing towards? The danger here is that we are creating kids that are physically healthy but mentally undernourished. We are cramming their brains with the things we think they’ll need to succeed but we are not feeding their spirits or their souls.
Ref: Sydney Morning Herald (Aus) 28 June 2008, ‘The Trouble with Tweens’, M. Hamilton. www.smh.com.au
Source integrity: ***
Search words: Gen Z
Trend tags: kids, teens, tweens
The Prosperity Paradox
Have you noticed how ‘Bling’ is booming in developing countries such as Russia and China whilst at the same time ideas such as frugality and sustainability are taking hold in other parts of the world? Well the reason is that consumption patterns change significantly as economic prosperity develops. A few years ago two economists called Kerwin Kofi Charles and Erik Hurst at the University of Chicago found that, all other things being equal, African Americans tended to spend more of their income on cars, clothes and jewellery. Now a new study has put a figure against this. Typically, an African American family will spend 25% more on cars, jewellery, clothing and personal care compared to a white counterpart, with the difference being made up by less expenditure on education, This isn’t just a lazy racial stereotyping either. Looking at countries similar patterns emerge with lower income groups spending lavishly on luxury goods. So what’s the explanation? According to the economists what’s going on is that poorer people spend on luxury goods to prove to others in their immediate peer group that they are not poor. Hence what a gold Rolex says is not “I’m rich” but rather “I came from a poor background and did well”. As individuals (and nations) get richer this spending shifts from ostentatious products to more discrete services and experiences. A shift also occurs towards spending on goods that are externally directed (cars and clothes for instance) to goods that are less visible to the outside world. In other words countries, like people, want to show off how wealthy they are but eventually this need wears off. This finding obviously has significant implications for luxury goods companies although one suspects that they know this already. As for what’s next, expect time and space to become the ultimate luxuries along with goods and services that are only available to a limited number of people that fulfil certain non-financial criteria.
Ref: The Atlantic (US) July/August 2008, ‘Inconspicuous consumption’, V. Postrel. www.theatlantic.com
Source integrity: *****
Link: Bobos in Paradise by David Brooks and the Middle-Class Millionaire by Russ Alan Prince and Lewis Schiff.
Search words: Bling, luxury, status
Trend tags: Premiumisation
They Know Where You Are
Not many people realise it yet but we are on the cusp of a major boom in location-based services. Gartner, the technology research firm, claims that this market (which currently includes navigation and search devices) will grow from $485 million in 2007 to $8 billion in 2011. So what exactly are location based services?The point here is that GPS equipped devices such as mobile phones, car navigation devices and digital payments (the use of pre-paid cards, credit cards or contact less payments for example) are generating large volumes of information about where people are and, in some instances, what they are doing and this can be used to predict consumer behaviour and demand. An example of where this is going was a paper recently published in the scientific journal Nature that analysed data from 100,000 cellphone users in a European country. What the researchers found was that people generally follow set routines and this means that predicting where they’ll be at any given time is fairly easy. The problem, of course, is what to do with the mountains of information that these devices are producing. One firm that has an answer is a software company called Sense Networks in New York that uses complex algorhythums to make predictions or recommendations on various topics or questions. For example, billions of data points from a single city can enable supermarkets to locate stores in precisely the right place or allow traffic signals to be adjusted.Does this affect privacy? Yes, although most of the companies involved insist that it is anonymous aggregated data that interests them, not the precise tooings and froings of specific individuals. Moreover, in the future it’s not impossible that the individuals that generate this data could be compensated for the use of it, either directly with monetary payments or via the exchange of services for data.
Ref: New York Times (US) 22 June 2008, ‘Predicting where you’ll go and what you’ll like’, M. Fitzgerald. www.nytimes.com
Source integrity: *****
Links: Reality Mining (see What’s Next, 2008+ Trends report).
Search words: Location awareness, mobile phones, privacy
Trend tags: GPS, localisation
A New Form of Neglect
Poverty and neglect are usually thought of terms of limited access to certain products and services or else they are linked to income, education or healthcare. Moreover, neglect is generally thought of as a situation that affects lower income groups. However, a new form of neglect is emerging in developed countries such as Britain and the issue is tending to be a middle class problem. In short, parents aren’t interacting with their children as much as they used to and the result is a mixture of quasi-feral kids and mental harm. Why is this happening? The answer is a blend of economics (parents can’t afford to be at home as much as they used to) and philosophy (parents have become selfish pleasure seekers that put their own needs ahead of everyone else). The result is that parents are outsourcing their own children to various bought in services ranging from after school clubs to nannies imported from the former Eastern block. These kids may be safe but contact with parents is severely restricted and they aren’t doing much of practical use either. Add to this free childcare in the form of television and computers and the end result is a generation of guilt-ridden parents mixing with a generation of kids with a range of social problems that we won’t know much about until they grow up.Linked to this story is another about poverty in cities like London and in particular how cities are polarising between the very rich and the very poor. In London 50% of all children are still classed as living in poverty. This is a figure that has not changed since 2000. Meanwhile the superrich have moved in and the middle class are being squeezed out to the suburbs.
Ref: The Spectator (UK) 14 June 2008, ‘Even middle-class children are suffering from neglect’, R. Johnson. www.spectator.co.uk
See also Newsweek (US) 12 May 2008, ‘The Victim of Success’, W. Underhill. www.newsweek.com
Source integrity: ****
Search words: Outsourcing, kids, children, neglect
Trend tags: Polarisation
The Future of Suburbia
Cities have experienced a new lease of life recently with legions of new apartments being built. There are also claims that city living is ‘greener’ than living on the outskirts and this attitude is fuelling a race to the centre. Or that’s what people think. Despite what you might read, the growth of cities has not been at the expense of suburbia. For example, the city of Chicago added 50,000 new residents between 1990 and 2006, halting years of net outflow, but the outer suburbs of the same city grew by over one million over the same period. Indeed, by 2000 American suburbs contained more people than all US cities and the countryside added together. What is changing is who is moving to suburbia and why. US suburbans are now more racially and demographically diverse than at any time in history and are often more diverse than their metropolitan counterparts.
Ethic diversity has increased and whilst suburbs remain child orientated they are home to increasing numbers of older people. Furthermore, immigrants now frequently skip the urban ghetto stage and move directly to city suburbs whilst the cities themselves are becoming less not more ethnically diverse. Even gay couples are moving to the suburbs due to greater levels of tolerance and acceptance. However, the most important reason for the growth of suburban populations is economic – that’s where the jobs are increasing to be found. For instance, a report soon to be released by the Brookings Institution says that 45% of the jobs in America's largest urban areas are located more than ten miles from the city centres. In other words, an increasing number of Americans want to live and work in areas that look and feel like cities but are not. Nevertheless there are problems ahead.
First, many American suburbs grew physically on the back of cheap money and relaxed lending standards both of which have now come to and end, at least temporarily. Hence foreclosures are rising and house prices are dropping rapidly in the suburbs although the same can to some extent be said about inner city apartments. Something else that’s a problem is traffic, those rivers of anger than frustrate so many a suburbanite, and crime, which is also moving to the suburbs.However, perhaps the biggest problem is neither economic or security related. The ageing of suburbia means that older people are putting an increased strain of local services (especially health) and older people are fighting against tax increases to fund, amongst other things, schools, which they aren’t interested in. Does this mean that suburbs will soon be hotbeds of discontent? Unlikely. One thing that isn’t changing is the essential tameness of suburbia.
Ref: The Economist (UK) 31 May 2008, ‘An age of transformation’, www.economoist.com
Source integrity: *****
See also The Economist (UK) 21 June 2008, ‘The Big Sort’.
Search words: Suburbia, cities, housing, population
Trend tags: Urbanisation
Big Ideas for 2008 and Beyond
It’s getting a bit late in the day to talk about big ideas for 2008 but a list of eleven and a half big ideas in a recent issue of the Atlantic magazine is worth pondering. Putting aside a few ideas such as Post-Partisanship, We Tortured, It’s Lonely at the Top, The Surge and the End of 9/11, which are probably a little US-Centric for non-American readers, the list, in no particular order, is; Mass-Market Atheism (i.e. the vogue for atheistic texts), the Return of Regulation (a response to mortgage-backed securities), Personal Geonomics (i.e. personalized and predictive medicine), Carbon Consciousness, Not Bombing Iran (the threat remains but our perception has changed), MySpace Politics and Renting (i.e. not buying). By the way the half refers to it being lonely at the top, which is a reference to the likes of American’s such as Eliot Spitzer.
Ref: The Atlantic (US) July/August 2008, ‘The 11 1/2 Biggest Ideas of the Year. (various writers). www.theatlantic.com
Source integrity: *****
Search words: Trends, ideas, 2008
Are Trends Your Friends?
Should you pay attention to trends? Trends are useful because they give a sense of direction. However, you should always be suspicious. A trend is almost never forever and trends should not be embraced for reasons of popularity alone. Trends are useful but there is a tendency in planning circles to forget about cycles and to confuse something that’s familiar with something that’s certain. Organizations are also self-referential, which means that internal strengths may be overplayed and external events or competitors are underestimated. Moreover, there is a strong bias in organizations towards expecting that what has happened in the past will continue into the future. Trends are not ‘facts’ anymore than statistics are cosmic truth. Both trends and statistics can be manipulated by people with particular agendas or an interest in a specific future. Moreover, whilst trends can be useful in terms of brand maintenance or strategic evolution the future really belongs to those individuals and organizations that are able to loose sight of the shoreline and set sail into unchartered territory.Most organizations are so busy analysing trends that they forget that they can create or invent their own.
Ref: Various including American Thinker (US) 30 June 2008 ‘Lies, statistics and trends’, J. Gammon www.americanthinker.com/blog See also Salon (US) 29 June 2008, ‘I like to watch’, H. Havrilesky www.salon.com
Source integrity: Various
Search words: Trends
Government, energy & environment
Blowing Hot and Cold about Climate Change
Have you noticed how global warming has turned into a religious crusade of late?On one side we have the evangelical believers that talk in apocalyptic terms about the ‘end of days.’ Opposing them are the heretics who deny anything is happening or insist that it is still uncertain why something is happening or what the consequences will be. Both sides use armies of facts to fight their battles although both sides seem to forget that these ‘facts’ are historical and that any forecast is just a prediction and not an empirical observation. Somewhere in the middle of this fighting are the vast majority of people who suspect that something significant is going on but aren’t too sure what due to the complexity of the debate. Clearly what’s missing is a sober analysis of the situation and a balanced discussion of some of the potential problems and solutions. Most people do in fact agree that there have been large increases in CO2 in the atmosphere and there is not much disagreement that mankind is largely responsible for this. A recent survey of climate scientists, for instance, found that 70% supported the view that mankind was responsible. Where the agreement breaks down is what the effects of this will be on temperatures and what should be done about it.
What’s interesting to me about this debate is that to some extent it is polarised along the old lines of left and right. Why could this be? One answer might be that since the collapse of Marxism some people have been looking for a new ‘big idea’ to believe in and climate change ticks all of the boxes. Radical environmentalism appeals to people that believe that accumulating wealth is morally suspect and also strikes a chord with people that think global wealth should be more equitable. Radical environmentalism is thus anti-consumerist and anti-capitalist and at the extreme favours population control, higher taxation, new regulatory regimes and radical changes to personal attitudes and behaviour.Another argument, put forward by the historian Arthur Herman, is that the mind of man is at times taken over by anxiety and apprehension when real physical worries are missing. In short, worries become invisible and unknown when real enemies disappear. The logic here is that the collapse of the cold war and the booming global economy have removed many of our everyday worries allowing superstition to take hold once again. Old fashioned fear and ignorance flourish in an age of unreason where trust has evaporated and change is endemic.
Both of these ideas strike a chord with me. First, the power and authority of a priesthood is always greatest when ignorance and fear are most prevalent. Compare the past to the present and the idea makes some sense. Climate change has also moved from scientific theory to a form of quasi-religion with the true believers promising penance and biblical hell if sceptics and heretics do not change their ways and repent. But, strangely, talk of damnation and salvation does seem to sell to a secular audience. What’s clever about this is that from a scientific point of view climate fears are a non-falsifiable hypothesis. Arguments for an impending apocalypse are indistinguishable from claims about the existence of God. Neither can be disproved. So, to sum up, is climate change actually a problem? On the balance of probability I would suggest that it is and we should be doing something about it, if only from a risk management perspective. Having said this there are worse catastrophes imaginable and there might be better ways of spending trillions of dollars if your fundamental objective is either to save the most lives or to improve the quality of life for the greatest number of people.
Ref: The Australian (Aus) 4 August 2008, ‘Climate hysterics v heretics in an age of unreason’, A. Herman www.theaustralian.com.au Wall Street Journal (US), 1 July 2008, ‘Global Warming as Mass Neurosis’, B. Stephens www.wsj.com Spiked Online (UK) 7 March 2008, ‘The King of Climate Porn’, T. Gilland www.spiked-online.com Spiked Online (UK) 24 July 2008, ‘The only certain thing is that the science is uncertain’, R. Lyons. See also Cool It by Bjorn Lomborg
Source integrity: Various
Search words: Climate change, global warming, global cooling, risk,
Trend tags: Environment, sustainability
New Strategic Threats
For three decades strategists in Washington DC have worried about oil as a national security issue. Recently the price of oil has come close to $140 a barrel and food inflation is also fuelling unease, not only in US and European foreign policy circles but in developing countries too. To date there have been riots in around 30 countries due to the cost of food and according to Morgan Stanley, 42% of thew world’s population now lives under double-digit inflation. The threat is most acute in Muslim nations such as Pakistan, Malaysia, Indonesia, Morocco and Egpyt and Saudi Arabia is seriously worried about being cast as a scapegoat. Josette Sheeran, executive director of the world Food Programme, has made the comment that many of the world’s fledgling democracies are only seven meals away from social anarchy and civil upheaval. However, perhaps the threat of radicalisation is not merely confined to emerging democracies. Rapidly rising food and energy prices in countries such as the US and UK also have the potential to topple governments.
Ref: Financial Times (UK) 21-22 June 2008, ‘West rethinks strategic threats’, C. Hoyos and J. Blas. www.ft.com
Source integrity: *****
Search words: Risks, uncertainty, wildcards, oil, food inflation
Trend tags: Inflation, resource shortages
Future Wars
According to David Armatage, a Professor of History at Harvard University, we may have seen the end of formal inter-state wars, with the US-Iraq war being the last formal occurrence. The evidence cited to support this view is fairly impressive. Since 1989, 115 of the world’s 122 wars were civil wars and last year there were 32 civil wars in progress compared to no inter-state wars (Iraq and Afghanistan now being classified as civil wars). This view roughly follows the collective wisdom that democracies never go to war with each other and also ties into some of the ideas expressed by Francis Fukuyama’s “end of history” thesis. As you might expect the economists have now got involved and have calculated that an average civil war costs US $60 billion including loss of life and resources wasted. Given that there are roughly two major civil conflicts per year that adds up to $120 billion annually, which is more than the developed world spends on humanitarian aid to developing counties. It is also noted that civil wars tend to be fought between poor countries and it is the poorest members of these countries that tend to suffer the most. This is all very compelling stuff but I can’t help think that there is al least a possibility that a small incident between, say, the US and China, or between Israel and Iran, could at least temporarily become a full blown war. More likely perhaps is a new cold war between the US and Russia or between the US and China. Let’s hope not.
Ref: Sydney Morning Herald (Aus) 19-20 July 2008, ‘ The shape of wars to come’, D. Armatage. www.smh.com.au
See also The Atlantic (US) June 2005, ‘ How we would fight China’, R. Kaplan and The Atlantic, July/August 2007, Superiority Complex’, K. Lieber and D. Press.
Source integrity: Various
Search words: War, cival war, conflict
Trend tags: Anxiety
Open-Sourced Government Policy
In the US political bogs are a powerful tool. Using social networking and web 2.0 principles politicians are connecting with, organising and inspiring vast numbers of voters. They are also bumming money in spectacular fashion. For example, back in December 2006 Ron Paul (a former candidate for a Republican Presidency) raised US$6million in a single day online. Things in the UK are smaller and considerably more sedate. In the US the blogosphere is vibrant because the mainstream US media isn’t. In the UK this isn’t the case. As a result the official websites of the UKs three major political parties receive miniscule amounts of traffic. This may be generational and there are certainly signs that the new blood in Westminster is more attuned to using citizens plus new media to improve policy-making. George Osborn, the Shadow Chancellor, is also making noises about putting US style crime maps online in the UK and is also openly talking about using open-sourced principles to involve the citizenry in policy creation. Given that the Jubilee Petition of 2000 attracted some 24 million signatures it looks as though there are a considerable number of people out there that might welcome such a development.
Ref: The Economist (UK) 19 April 2008, ‘Semi-connected’www.economist.com
See also Financial Times (UK) 17-19 May 2008, ‘Signature Power’, P. Goldman www.ft.com and The Atlantic (US) July-August 2008, ‘MySpace Politics’, J. Green. www.atlantic.com
Source integrity:*****
Search words: Policy, open government, open innovation, UGC, customer co-creation
Trend tags: Open
The Participative Learning Trend
In education, the idea of teachers or lecturers that are in the know teaching or lecturing students that aren’t has been the dominant model for centuries. Students were presumed ignorant until proved otherwise. However, things are changing. A recent US study of computer gamers found that young gamers did not take kindly to formal front-end instruction. Instead of reading instruction manuals, the preferred mode of learning was hands on trial and error with instruction, such as it exists at all, being found from peer to peer inquiry. This is very much a Generation Y trait and participative learning is making its presence felt at the university level with students boycotting lecture theatres in favour of downloading lectures directly onto computers or iPods. In other words the architecture of learning has shifted from a vertical structure where physical presence was virtually compulsory to a horizontal or networked approach in which learning is quite literally virtual. But should everything move on line? Clearly there is considerable scope to allow students to collaboratively design a learning process and to provide feedback on the results but one wonders whether removing many of the physical and social aspects of learning will negatively impact on students’ ability to think. Ideas and knowledge are inherently social and removing the physical element altogether may prove to be a big mistake.
Ref: The Australian (Aus) 2 July 2008, ‘No longer tuned in to his masters voice’ E. McWilliam and N. Jackson. www.theaustralian.com.au
See also The Australian literary review (AUS) 6 August 2008, ‘Paralysed by postmodernism’, G. Kitching. www.theaustralian.com.au/alr
Source integrity: ****
Search words: Education, schools, learning, Gen Y
Can't See the Wood for the Carbon-eating Trees
About 8% of the CO2 in the atmosphere is absorbed by vegetation and returned as oxygen each year. Therefore, the life expectancy of an average CO2 molecule is twelve years, which means that altering the CO2 content of the atmosphere can be achieved relatively quickly if the technology to so existed. One possible technology to do this is genetic engineering, specifically carbon-eating trees. Bearing in mind that the effects of transformative technologies tends to accelerate over time, it is quite possible that a biological solution to climate change could be available within 60 years and even within 20. Food for thought.
Ref: The Australian (Aus) 14-15 June 2008, ‘Cooler climate for Rudd’, C. Pearson
Source integrity: ****
Search words: climate change, CO2, wood, trees
Trend tags: Genetics, genetic engineeering
Science, technology & design
Teaching Robots to be Nice
We have become accustomed to the idea of robots making widgets, but can they learn to be emotional? A research project in six countries is exploring the possibility that robots can learn emotions from humans, just as babies do, so they can respond appropriately. Robots learn how to behave from the feedback they receive from humans, for example, kind words, or helpful behaviour, and even facial expressions. They will tune into physical movement, proximity between the human and robot, and frequency of contact. In Japan, where 40% of the population will be elderly by 2055, scientists are looking for ways that robots can become carers. For example, a robot might cook dinner, then clear the table and wash up afterwards. The Information and Robot Technology Research Initiative (IRT) is working on making robots a normal part of household life, with the assistance of companies like Toyota. They place sensors in robots that mimic human senses, so they are able to safely make physical contact with humans. As sensors become smaller, it will be possible to give robots a very sophisticated sense of touch. If this sounds unnerving, robots are being used to plant and pick strawberries and do the planting and weeding in rice paddies, which saves farmers much backbreaking work and reduces the need to employ labour. Using robots in agriculture is perhaps more palatable than have them look after our aging parents. But fewer would probably argue with the appeal of having them cook dinner.
Ref: BBC (UK), 23 February 2007, ‘Emotion robots learn from people’. www.bbc.co.uk Also Nikkei Weekly (Japan), 28 April 2008, ‘Fielding robots’; and
Nikkei Weekly, 28 July 2008, ‘Will robots care for you later in life?’ www.nni.nikkei.co.jp
Search words: robots, emotion, feedback, sensors, babies, adaption, senior citizens, care, household, agriculture, strawberry farming, GPS, Japan.
Trend tags: Robotics
Source integrity: ****
On the Verge of Artificial Life
The idea that science can create artificial life is disturbing, so we give it less threatening names like “synthetic biology” or the more edgy, “synbio”. Yet advances in this field are progressing rapidly and some of the practical uses of this technology could be exciting and life enhancing – reducing climate change, even restoring extinct species.A team led by Dr Craig Venter has replicated the genome of Mycoplasma genitalium, which genes his team first identified in 1995. His stated aims are to discover the “minimal genome”, the one that is needed for survival and reproduction, and to combine genomics with technology, for example, using modified bacteria to make fuels. One way to understand how it works is to look at computer programs and the way they use a core operating system and then add functionality. Scientists have created a synthetic chromosome, which can be transplanted into a cell to make it “boot up”, like a computer. It suggests that in the near future, people will be writing DNA programs to achieve the kinds of life that they want, whether it is ethanol (Synthetic Genomics), high-tech fabrics (DuPont), or even self-flavouring and colouring yoghurt bacteria.MIT’s Registry of Standard Biological Parts is building a collection of BioBricks, which are DNA sequences with discrete and reliable functions. At a science fair last year, students were encouraged to use these BioBricks to invent new life, like “infector detectors” and even a virus that could be used to find and kill breast cancer cells. These discoveries are blurring the boundary between the biological and the artificial. It also begs the question of who will own the rights to these tools for making life?
Ref: The Economist (UK), 24 Jan 2008, ‘Nearly there’. www.theeconomist.com Also the Washington Post (US), 17 December 2007, ‘Synthetic DNA on the brink of yielding new life forms’, R.Weiss. www.washingtonpost.com and Slate (US), 30 November 2007, ‘Innocence and Syn’, J. Lichtenstein. www.slate.com
Search words: artificial life, DNA, genomes, modified bacteria, ethanol, Dupont, synbio, bio-terror, synthetic biology, iGEM, MIT.
Trend tags: DNA, Genetics, Fake
Source integrity: *****
How Machines are Merging with Materials
Imagine that if a job needed doing around the house, you were able to quickly assemble what you needed from a shape-shifting material. No more quick trips to the hardware shop. This material is already in the making, and it comprises millions of robotic modules. The US Defence Department has given a team of US researchers $US4 million to spend on creating cell-like robotic modules that can rearrange themselves like Lego into whatever shape is desired. One researcher has already created a 15-module robot on two legs that could be kicked apart into three pieces, each one made up of modules and a camera. Observers watched it crawl across the floor, reassemble itself, and then walk away. One question is how the modules should be arranged in the first place, for example, a snake of modules or like the atoms in a crystal. It might be simpler to remove modules from an existing structure than to have to add lots of modules and move them around. An engineer at University of Washington is attempting to copy the way molecules form living cells and cells form tissues by creating simple designs that build to become more complex. However, getting modules to “talk” to each other and decide on how to behave is a challenge scientists seem to love. Personally, I’m looking forward to the universal toolbox.
Ref: New Scientist (UK), 26 April 2008, ‘The mod squad’, J. Hecht. www.newscientist.com
Search words: shape-shifting, robots, claytronics, modules, electromagnets, self-repair, self-replication, universal toolkit.
Trend tags: Nanotechnology, robotics
Source integrity: *****
Sniffing Out Sin
Some say that smell is the neglected sense, but it is already part of regular surveillance around the world. It is not just that dogs are used to smell drugs; they are now used to smell people. As well as dogs, different countries are contemplating training bees, moths, wasps, cockroaches and even jackals crossed with dogs, The German police has a database of the scents of human activists and China has a “scent bank” of odours at crime scenes. What does all this mean for privacy? Lawyers are already concerned about the use of sniffer dogs because of their inaccuracy. A Privacy Ombudsman in Australia in 2006 reported that 74% of people searched by dogs were not in possession of illegal drugs. In their defence, police say they smell the area surrounding the individual, which respects privacy by removing the need to search them. However, if a certain smell is detected, then that individual is immediately linked with it and searched. People’s scent will change according to whether they are fearful, guilty, suffering from schizophrenia or even according to their skin colour. So there is still much to learn from this sense and, inevitably, privacy will suffer because there are few things more intimate than our personal odours.
Ref: The Guardian Weekly (UK), 11 April 2008, ‘What do noses really know?’, A.Marks. www.guardianweekly.com
Search words: olfactory surveillance, nose, smell, police dogs, border controls, intelligence, drugs, privacy, sniff.
Source integrity: *****
Falsify or demystify
One of the defining tenets of good science, as claimed by Karl Popper in The Logic of Scientific Discovery, is that its claims are capable of being falsified. If they can’t be falsified, then they are merely pseudoscience. As scientists debate the presence of black holes, the multiverse and the events before the big bang, this tenet becomes very difficult to justify. Does this mean that the falsification claim is wrong, or that science needs to be redefined? It could be argued that the multiverse or black holes cannot be falsified because they are unobservable. However, the theories on which they are based – quantum theory and general relativity – are falsifiable.Perhaps it is wrong to look at a scientist’s work in negative terms – ready to disprove them rather than looking at all the way that theories work. Newton’s theory of gravity was repeatedly falsified by certain observations, yet scientists are not going to reject the theory. Perhaps it is time to reject the capture of scientific process using deductive logic in favour of a more subtle approach – degrees of belief and probability.The Bayesian view is that if we accumulate positive evidence for a theory, then we are in fact “truthifying” what we know. It is based on mathematics and compares the probability of getting the observed results on the basis of each theory available. The theory with the highest probability is the one favoured. Looked at this way, the multiverse is scientific because it is based on theories with compelling evidence. Even the silliest of theories may never be proved wrong, but the weight of evidence will certainly keep them from having an impact. This change of philosophy from aiming to disprove to further proving may well say something about scientific culture today as opposed to its early murmurings many centuries ago.
Ref: New Scientist (UK), 10 May 2008, ‘Some swans are grey’, R. Matthews. www.newscientist.com
Search words: truth, falsifiable, black swan, Pierre Duhem, Einstein, Karl Popper, black holes, multiverse, cosmology.
Trend tags: Truth
Source integrity: *****
News, media & communications
Web 2.0 and the Evolution of Online Media
Is the Internet, and web 2.0 in particular, the biggest thing to happen in the history of media or is it just a fad wrapped up in an enigma and covered in a conundrum? According to Professor Patrick Barwise, who teaches management and marketing at the London Business School, (i.e. an old guy that might know what he’s talking about), the threat created by new media innovations such as social networks and IPTV is massively overrated. For example, while advertising revenue for traditional TV networks is bad it’s not “falling off a cliff”. Equally, while newspapers are having a hard time adjusting to the new media environment most are still making money and some are increasing circulations and revenues.The core of Prof Barwise’s argument is that while the digital revolution is changing distribution and consumption habits (e.g. more people are spending more time online and some consumers want to control, share or co-create the content) audiences have the same core needs that they had 50 years ago. Furthermore, research strongly suggests that there is very little demand for media on demand and that mobile video does not compete with the needs most people have of TV. Most people use TV relax at the end of a long day and they want to do it in their own home in the company of others. This could shift over time due to the generational crossover and it could also be that much of the technology is still in its infancy (e.g. download times are still slow in many countries so IPTV is not currently a viable option). Nevertheless, the argument is interesting.
Ref: Financial Times (UK) 19-20 July 2008, ‘Old media told to ignore net ‘hype’,
B. Fenton. www.ft.com See also Strategy + Business (US) 15 July 2008, ‘The Evolution of Online Media’, M. Cavanaugh. www.strategy-business.com
Source integrity: *****
Search words: Web 2.0, user-generated, co-creation, hype
Trend tags: Web 2.0
The Business of Blogging and the Future of Social Networks
Will blogs exist in the future? Nobody knows. One argument for extinction is that there is no revenue model in blogging but that could miss the point. Because audiences are generally small there’s no money to be made and this creates a resilience that commercial enterprises can only dream of. If anything is going to vanish perhaps it is social media but again the very lack of commercial models could be the main reason why they survive. Nevertheless there are some problems. Back in 2005 blogs were still the next big thing and businesses were blissfully unaware of their impact. Those business types that did know about blogs largely regarded them as a cathartic publishing tool for trivial information that was only read by the writer.This was, and still is, partly true but a few blogs have become huge with audiences that can sadden many a metropolitan newspaper.
The upside is that blogs and social media in general have democratised the media and a few other things besides. Blogs have broken down some very high walls although it could be argued that their influence is still slight outside of media and technology. One thing that hasn’t really taken off is the idea that businesses can blog about themselves to a general audience because nobody, quite frankly, is very interested. What blogs are clearly useful for is the creation of rich content around very specific subjects or people. However, the medium is still the message and most digital content is either lost in a sea of infinite content or else the digital nature of the message has the effect of reducing its power. As for social networks they have proved to be valuable in terms of transmitting content and ideas. Blueshirtnation, for instance, is an in-house social network ‘owned’ by Best Buy. It has 20,000 active participants and the group churns at a rate of 8.5%. Compare this last figure to an average churn rate for sales associates of 85% and you can start to see where some of the social value lies.
Of course social networks do suffer from two major drawbacks. First, if you post something on a site there is no guarantee that you will ever be able to get it back. The other problem is the opposite. Social networks may end up inadvertently destroying information because it tends to get scattered across a number of different places and it is difficult to locally back-up event streams or other data.
Ref: Various including: Business Week (US) 2 June 2008, 'Beyond Blogs’, S.Baker and H.Green. www.businessweek.com See also PC Magazine (US) January 2008, ‘Facebook kills your memories;, S. Segan. www.pcmag.com and Vanelsas.wordpress.com, ‘the human factor in social media trends’. A. Van Elsas.
Source integrity: Various
Search words: Blogs, blogging, business and blogs
Behavioural Marketing and Digital Privacy
Someone, I forget whom, once said that you become like those you are with.This might be true but these days you are increasingly judged by where you go, at least online. The issue here is ISPs tracking which sites users visit and then selling this information to advertisers. Sites like Google have been doing this for years but the difference is that Google only serves up ads on the basis of search terms used on its site. ISPs, in contrast, monitor everything you do and everywhere you go. Phone companies are much the same. Thanks to GPS they have information on where you are, where you’ve gone and, if you have a phone that houses digital cash, what you’ve bought. Add a bit of voice recognition software and text analysis and, hey presto, the phone companies will even be able to tell what you’re saying or what you’re writing.
To some extent this is a storm in a teacup. In almost all cases this data is sold on in anonymous bundles so there is no way to identify a specific individual. ISPs don’t sell information about visits to particular sites either. It’s purely patterns that people are interested in, for instance, whether you are interested in luxury cars or cheap watches. This is similar to the way in which retailers such as Tesco collect and analyse data every time a customer uses a loyalty card. It is patterns that can predict future behaviour that people are interested in. On the other hand data does get lost and can sometimes be used to identity individuals. The 2006 case involving AOL immediately springs to mind.So should we be worried? When it comes to digital privacy it’s probably better to be safe than sorry so perhaps a simple opt out is all that’s required. That and laws preventing governments from eavesdropping on data trails without a warrant.
Ref: New Scientist (UK) 26 April 2008, ‘Advertisers are homing in on your clicks’,
J. Giles. www.newscientist.com
Source integrity: *****
Search words: Privacy, predictive marketing, location aware devices
Trend tags: GPS, localisation, privacy, data mining
The Future of Reading
According to a recent survey 411,000 new books were published in the US last year and total sales hit 3 billion books. However, reading in the US, like in many other developed markets, is declining, especially amongst the young who have an ever-expanding range of other entertainment options at their fingertips. So what’s next in reading?One development that is slowly making its presence felt is digital books. Sony launched its e-reader in 2004 and the latest entrant is Amazon with something called the Kindle, a ‘book reader’ that can download digital titles from the Internet in a matter of seconds (think of iTunes for books and you’ll get the picture).
At the moment it’s far too early to tell where this trend will go although it does look as though digital publishing will be significant over the longer term. Right now most people are generally still wedded to ink on dead trees (82% expressed a strong preference for paper over any digital equivalents in one survey) but once people understand some of the benefits of e-books they might change their behaviour. Digital books obviously dispense with printing costs, warehousing costs and shipment costs so they are cheaper. For books that traditionally cost a lot of money – text books for example – this could make a very big difference.
Equally, if the economy tanks cost will move to the fore again so e-books could become more appealing. The reality is that digitalisation isn’t something that you can un-invent so digital books (and print on demand) are here to stay. Digital books won’t kill physical books but their existence will affect what we read and how we read it. We will see more serialisation for instance and book clubs will move online, except for specialist clubs that are able to capitalise on the human touch. As for the publishing industry itself, it's yet another example of polarisation and the death of the middle. At its most basic the publishing industry only requires two things: People that write books and people that read them. Anyone standing in the middle of this relationship is asking for trouble unless they are bringing the two sides even closer together or are adding value in terms of price, convenience or editorial ability.
Ref: The Economist (UK) 7 June 2008, ‘Unbound’. Also the Economist, 17 May 2008, ‘The final chapter’. www.economist.com
Source integrity: *****
Search words: reading, books
Trend tags: Online, physicalisation
Web Economics
Never in human history has it been so easy for an idea to connect with so many people for so little. The reason is the Internet and specifically something that some people are calling viral expansion loops. Viral loops aren’t just viral marketing although viral expansion loops are probably the best way in the world to communicate with vast numbers of people very quickly at little or no cost. Ning is a business with viral loops firmly embedded in its business model. Twitter, Myspace, Facebook, Linkedin, Wikipedia and Flickr are others.Viral loops are a way of designing a product, service or company so that they build themselves with astonishing speed. How do they do it? Simple, create something that’s good and then allow each new user to pass the idea onto others but ideally design things so that users link to other users or use other users to co-create content thereby improving either the scale or the quality of the whole.
Tupperware parties are a good example of viral loops but the frictionless nature of the Internet has taken the idea to the ultimate level. What’s fascinating about viral loops is that most of the time they don’t actually create content at all, they simply organise it. So what’s the dilemma? Mass audiences obviously attract the eyeballs of big advertisers and even small networks are theoretically valuable if a niche is niche enough. Hence a network of opera buffs in the US or, even better, around the world, is hugely useful to anyone wanting to sell opera buffs something relating to opera. But here’s the rub. For all the success that many of the businesses already mentioned have had, next to nobody has really worked out how to successfully monetise these sites beyond selling the entire network to someone else. Neither Twitter, Facebook, Flickr, Myspace or Facebook has a credible revenue model and retrofitting a revenue generating idea into these sites doesn’t really seem to work either. Of course, maybe these networks, like the Internet itself, simply isn’t something that has a purely cash value.
Ref: Fast Company (US) May 2008, ‘Ning’s infinite ambition’, A. Penenberg, www.fastcompany.com
Source integrity: ****
Search words: viral, viral loops,
Trend tags: social networks
Food & drink
The Future of Wine
Wine merchants Berry Bros & Rudd have released their Future of Wine Report, which explores predictions for the wine industry over the next 50 years. In volume wine trends, wines from the new world are expected to rise. China is already the world’s sixth largest wine producer and could be in first place by 2058. Global warming could see many non-traditional wine growing areas experiencing a climate suitable for grape growing. If droughts continue in Australia, it could be forced away from volume production and instead focus on niche fine wines. The other big movement in volume wines is a shift towards big brand wine. Berry’s suggest that by 2058, big brand wine could be grape specific, rather than being sourced from a particular country. Investment from spirit companies and supermarkets could push the big brand rise, and there’s the dubious prediction that customers will no longer care about wine regions, but ask for wines by brand or flavour.
Growing consumer demand could see a genetically-modified grapes coming into use, while companies will look for more lightweight packaging to reduce transport costs. In fine wines China will also be a contender. The country’s current 400 vineyards are expected to multiply ten-fold in the next 50 years, with up to a quarter of these producing fine wine. India’s wine industry is still in its early stages, but a growing appreciation for fine wine, along with an increasing number of vineyards could see the country become a serious wine-producing nation. In fact by 2058, there could be more nations that produce wine than those that don’t, with places such as Mexico and Brazil following the lead of nearby wine-growing areas like Chile. The en primeur market, in which people buy cases of wine before they’re even bottled, is expected to continue attracting big bucks. As prices continue to rise, so do opportunities for investment. Growing demand for fine wines, both as drinking and investment opportunities, will push prices of top-end wines sky high. Markets could become so competitive that limited production wines or wines from a great vintage could spark bidding wars. At the current rate of increase of 15% per annum, a ₤9,200 case of Chateau Latife-Rothschild would be worth just under ₤10 million by 2058.
Wine producers are continuing to search for alternatives to cork, which currently still has a failure rate of around 2%. The hope is for the development of a product with cork’s ability to only allow in a small amount of oxygen. With increasing demand for fine wines, so comes a rise in the production of fake bottles. Little has been done to combat the problem as yet, but embedding chips in bottles or corks could help with battling counterfeit. And finally, there has been a recent discovery that bees have a highly developed sense of smell – discerning enough to be able to detect the odours present in corked wine. Useful yes, but it would mean sommeliers carrying the bee around with them.
Ref: Berry Bros & Rudd Future of Wine Report. www.bbr.com (August 2008)
Source integrity: *****
Search words: wine, drink, wine trends, drink trends
Health Food Trends
This year has seen an inundation of new food products on the market that boast health benefits. These foods claim to do anything from fight colds to preventing wrinkles or cancer, by the addition, or in some cases the omission, of certain ingredients. Here are ten trends you can expect to see. Junk-free foods – companies are removing additives, preservatives, artificial colourings or flavourings and ‘otherwise unknown ingredients’ in order to boast their junk-free status. Even Coca Cola has launched a multi-million dollar campaign to advertise its lack of additives. Naturally nutrient rich – people are seeking more authentic sources of their nutrients. Rather than reaching for fortified foods, they’ll be heading for foods such as pomegranates and acai berries in their natural state. Ethical eating – growing concerns about the environment are leading companies to promote their ethical position, and more consumers are ‘eating green’. Phytonutrients – these natural plant compounds may be hard to pronounce – with names like polyphenols, qercetin and anthocyanins – but it’s suggested their ability to fight disease is greater than that of vitamins.
Better-for-you kids’ food – concerns about childhood obesity are seeing a new wave of kids’ food products that contain less sugar, more fruit and more organic ingredients. Inner beauty – dubbed ‘nutricosmetics’ these food claim to provide all kinds of beauty benefits. A collagen injected marshmallow in Japan boasts lip-plumping properties, while other products claim to erase wrinkles or give you shinier hair. Brain food – claims of brain-boosting properties have nearly tripled in recent times according to research firm Datamonitor – most of them fortified with omega-3s found in fish oils. Being good to your gut – Datamonitor recorded that 200 new products claiming benefits for digestive health were introduced in 2007 – some fortified with fibre and others with probiotics. Probiotics are now popping up in foods including cheese, milk, smoothies, juice, snack bars, cereals and soon, even chocolate. Foods with fullness – satiety is the next buzzword in the diet world. Products such as Quakers Weight Control Oatmeal and Kellogg’s Protein Water claim they keep dieters full for longer and thereby aid in weight loss. Eating to ease inflammation – ageing Baby Boomers are increasing demand for ‘joint health’ foods and beverages that to provide pain relief from arthritis or exercise.
Ref: Various
Search words: Food trends, probiotics, nutricosmetics, Phytonutrients
Trend tags: well-being, health
The Bulking Up Trend
With the rising cost of raw ingredients such as corn, eggs, milk and oils, manufacturers in the food industry are feeling the pinch. Prices of electricity and fuel are also up, making it harder to keep the cost of production and distribution down. Some companies are reluctant to pass these price rises on to customers, instead finding ways to absorb the costs. Nestle claims it has coped with the rise in commodity prices thanks to well-planned sourcing, buying stocks directly from farmers rather than on the open market. It has, however, also changed the recipes of some of its products to reduce the amount of milk used.
Kraft also, has been working hard to adapt its products for leaner times. Kraft’s Miracle Whip, a salad dressing and sandwich spread, has seen a revamp, marketing the spread for leaner times. It now comes in a plastic jar instead of a glass one, and has a wider opening that allows consumers to scrape the very last remnants out of the jar. It is also being marketed as having half the fat of mayonnaise, which has actually been a cost-cutting measure for Kraft. Miracle Whip now contains less of the fattening (and expensive) soya oil, and more water, which is slimming and obviously a lot cheaper. Another Kraft product, Cool Whip, could inspire other companies looking for a way to cut down on high-cost raw ingredients and bulk out their products. Although it is essentially a whipped cream substitute, it contains no dairy. The texture of whipped cram is achieved through the use of semi-solidified plant oils such as coconut and palm kernel oils, which are relatively cheap. These are then whipped, which means the product contains a high percentage of water and air – both cheap ingredients. The only dairy element in Cool Whip is sodium caseinate, a protein derived from milk, which is used to help the oil and water mix. The rest is a delightful mix of (among other things) corn syrup, sodium monostearate (also used as haemorrhoid cream) and polysorbate 60, a major ingredient in sexual lubricants.
Ref: The Economist (UK), 12 April 2008, ‘Tightening belts’. www.economist.com; Wired (US), 24 July 2007, ‘Cool Whip’,
Source integrity: *****
Patrick Di Justo. www.wired.com
Search words: Food inflation, resource scarcity, bulk
The End of Food
Amid the rising global food crisis, experts are returning to the predictions of Thomas Malthus. In 1798, the English parson predicted that in the event of the population outgrowing food supply, an increasing mortality rate (mainly mass starvation) would readdress the balance. Currently we are facing a worldwide food crises, with food prices in as many as 33 countries skyrocketing and 800 million people going hungry. But it doesn’t necessarily mean that Malthus was right. Malthus made his predictions before the industrial revolution meant farmers could produce more food at a faster rate, and also based his theory on the idea that the population would continue increasing in times of prosperity.
The main food crisis that we are facing now is not a problem with underproduction, but with overproduction. The rich are not only eating the wrong kinds of food (mainly more meat and cheese) but are eating far too much of it. So while there are 800 million people starving, one billion people worldwide are obese. In an attempt to put food back within the reach of the very poor, there is a huge emphasis on creating cheap, plentiful food – a move that has been detrimental to food and the food industry.Chickens are now reared at great speed in an attempt to keep up with demand, and the resulting breast meat is often pale, soft and exudating or PSE. Rather than prevent PSE, which results from a large volume of lactic acid released after death, poultry firms pump the breast full of salts and phosphates to keep it artificially juicier. Other parts of the industry see a great deal of waste. The demand for bacon means more pigs, and more pigs mean more pig poo. In traditional farming situations, this waste would be used to fertilise crops, but an emphasis on monoculture means animal and crop production is kept separate.
A waste storage facility for pig poo in North Carolina burst in 1995, emptying into a river and destroying aquatic life for 17 miles. Fish is not necessarily a safe option either. Most people consume fish at the top of the food chain such as cod or bluefin tuna, while shunning fish such as mackerel or herring, seriously upsetting the balance. Fish farming may help protect supplies of fish stocks, but as with industrial chicken farming, it has become an unsustainable form of production. A demand for popcorn shrimp in America’s strip malls becomes the destruction of wild shrimp stocks in South East Asia and the deforestation of mangroves in Ecuador. The result of the current system is that in the Western world, where people who seemingly have more food and more choice, the products on the shelves are quite removed from real food – high-yield, low-maintenance crops made into different forms.
Ref: The New Yorker (US), 19 May 2008, ‘The Last Bite’, Bee Wilson. www.newyorker.com
Source integrity: *****
Search words: Food inflation, resource scarcity, food crisis
Hidden Culprits in the Global Food Crisis
There has been plenty of attention given to the crops-for-energy debate, with the rise in the production of biofuels blamed for fuelling the current world food crisis. In fact, in a report from the World Bank, as much as three-quarters of the recent price rises can be attributed to the shift to biofuels. But others suggest that this is a narrow interpretation of the situation, claiming there are bigger contributors to food shortages. The argument is that food-producing land has not simply been lost to biofuels, but been lost from production altogether. For at least the past 20 years, both the US and the EU have implemented polices that have reduced food output. Farmers have been offered rewards for retiring land from food production, while in Africa, farmers have been penalised for trying to increase yield. Much of the land retired has been used to increase the number and size of national parks, with the area taken up by national parks worldwide has grown from nine million square kilometres in 1982 to 19 million in 2003. As farmers look to boost yields on the land that is available for crop growing, the use of GM crops is expected to rise.
The past decade has seen a 70-fold increase in the use of GM crops, with a further doubling of use expected by 2015. The pressure on food supplies also results from the rising incomes of those in emerging economies. Higher incomes means people not only eat more, but eat more meat, and production of meat takes its toll not only on the environment, but on natural resources. The world’s total meat supply has risen from 71 million tonnes in 1961 to 284 million in 2007. During this time, per-capita meat consumption more than doubled. The American market accounts for around 15% of the world’s total – around 10 billion animals per year. And all of these animals need both land and food. It’s estimated that 30% of the world’s ice-free land is used either directly or indirectly for livestock production. In the five months to January 2008, 1,250 square miles of rainforest in Brazil were cleared for grazing.
Meat production is also an inefficient way of using resources. It takes two to five times the grain required to produce the same number of calories through livestock as it does through eating the grains directly. So while 800 million people are hungry, the majority of the world’s corn and soy supplies go to feeding pigs, cattle and chickens. Meat production is also takes an unexpectedly high toll on seafood supplies, with cows, pigs, sheep and chickens fed seafood in the form of fishmeal. Cattle alone consume more fish than the world’s sharks, dolphins and seals combined. And although meat is a valuable source of protein, we are consuming far too much of it. Although the recommended daily intake of protein is around 55 grams, Americans are eating around 110 grams per day, with 75 grams coming from animal protein.
Ref: Spiked (UK), 7 July 2008, ‘Food price rises: are biofuels to blame?’, James Heartfield. www.spiked-online.com; Financial Times (UK), 13 February 2008, ‘GM crop growth set to double by 2015, ‘Salamander Davoudi’. www.ft.com; The New York Times (US), 27 January 2008, ‘Rethinking the Meat Guzzler’ Mark Bittman, www.nytimes.com; Natural Health and Vegetarian Life (Aus), Summer 07/08, ‘Stopping Whaling and Environmental Hypocrisy’, Paul Watson.
Search words: Food crisis, food supplies, food inflation
Retail, shopping & leisure
Is The Long Tail a Bit of a Dog?
When Chris Anderson, of Wired fame, aired his theory of the long tail it was lauded as the new way in the digital world. In essence, as the Internet made it cheaper to offer a much bigger range of products, people could go beyond the popular and indulge their personal tastes by buying more obscure items. It looked as if the blockbuster strategy was dead. But this failed to consider that the people who buy from the long tail might also buy from the head. Or that people like to buy what is popular.The Winner-Take-All Society, a 1995 book by Frank and Cook built on Sherwin Rosen’s “superstars effect”. They claimed that nobody will pay for an inferior version if they can have a better one, people are inherently social and like to share their tastes with others and, when the marginal cost of reproduction and distribution is low, the brisk seller is the best. These are all good reasons to stick to the blockbuster.
Researchers looked at a DVD rental service (Quickflix) and an online music service (Rhapsody) to see which theory was playing out in practice. They found that the top 10% of Rhapsody titles accounted for 78% of plays and the top 1% for 32% of all plays. The Quickflix results showed the same concentration. The top 10% of DVDs accounted for 48% of all rentals and the top 1% for 18% of all rentals. Meanwhile, the long tail shows a rapidly increasing number of titles that sell rarely or never.According to McPhee’s Theory of Exposure, niche products experience a double jeopardy effect: they are not well known, and the people who know them are the ones who know more and prefer the popular products. According to our researchers, people buying obscure items in the long tail are still spending more on popular items from the head. In spite of having a choice, people still tend to give lower ratings to obscure titles and prefer hit products.For this reason, producers should still favour their blockbusters, keep costs low on niche products, market popular products in digital channels, and use hit products to promote lesser ones. Retailers should offer niche products to heavy buyers, keep costs low on unpopular items, acquire customers through popular products, and try not to direct customers to the long tail. It looks like the tail doesn’t wag the dog after all.
Ref: Harvard Business Review (US), July-August 2008, ‘Should you invest in the long tail?’, A. Elberse. www.hbr.org
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Search words: long tail, blockbusters, niche, Chris Anderson, winner-takes-all, McPhee, theory of exposure.
Trend tags: Fragmentation
Losing Weight Around The Middle
While society grows increasingly fat, it looks as though retail is still losing weight around the middle. The much-publicised trend of trading up and trading down, or the bifurcation of the market into luxury or discount, continues to batter the middle. Bland department stores suffer while brands like Zara and Primark (discount), or Neiman-Marcus and Coach (luxury), continue to thrive. It is the same with store size: the biggest and the smallest are most successful. As economies weaken, it is likely that shoppers will keep wanting to have it both ways: save money and indulge.Trend watcher, Howard Saunders, has compiled a list of the top ten of retail stores in London that certainly supports this stance. Top is Whole Foods Market, where people can buy 32-day-old dry aged beef and 72 varieties of tomato, and food will never be the same again. Second is Daylesford Organic, which is part of the “push for posh” and “ridiculously expensive”. Third is Primark, where people are “trying on bras over the top of their clothes” because of massive changing room queues. Meanwhile at 8th place, Cos, owned by H&M, is setting out to transform the mid-market: with attitude. This begs the question what a retailer has to do to claim back some of the middle ground, particularly as that is where the competition is not. As JC Penney claims, there is a lot on the table for them.
Ref: Inside Retailing (AUS), Oct-Nov 2007, ‘Westfield World Retail Study Tour’, R. Stockdill. www.insideretailing.com.au
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Search words: midmarket, discount, trading up, trading down, Whole Foods Market, Neiman-Marcus, luxury, department stores.
Rising Petrol Prices Make Us Click
If car-addicted Americans can stop driving their cars, then surely anybody can. Instead of driving to the mall, Americans are saving petrol and shopping online and some companies, like Nordstrom, Bloomingdale’s and Target, have even offered free shipping. JC Penney saw an 8.7% increase in online sales in the first quarter of 2008 and a 7.4% decrease in same-store (physical shop) sales. In the same period, Gap claimed a 21% increase in online sales and an 11% decline in same-store sales. Forrester Research backs up this trend and forecast net sales to pass $200 billion this year, 14% up from 2007. Even if they do visit a physical shop, people take an Internet mindset with them. Call it the eBay phenomenon. Certain shops, like Best Buy, Circuit City, and Home Depot, have seen an increase in customers who want to haggle over prices. After all, if they are well-informed online, they know what things are worth and can bargain with that information. While this suits customers, it hurts retail because it makes shoppers highly price conscious and less brand loyal. Even if oil prices dropped again, driving to the mall will be less important to shoppers than the empowerment of being well informed. Takeway: When, one day, oil does hit $200 a barrel one shift will be online.
Ref: New York Times (US), 19 July 2008, ‘To save gas, shoppers stay home and click’. S. Rosenbloom. www.nytimes.com Also, Sunday Republican (US), 23 March 2008, ‘In-store haggling reborn’. M. Richtel. www.repub.com, Financial Times (UK), 21 May 2008, ‘US consumers hunt for discounts and take fewer trips to the mall’, J. Birchall. www.ft.com
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Search words: online shopping, discounts, petrol, shipping, haggling, bargaining, Wal-Mart, electronics.
Trend tags: Online
Austerity 2.0
There was a time when swapping clothes would have been seen as the height (or depths) of bad taste. After all, who wanted to wear someone else’s cast-offs? Today, we call it “responsible spending” and even though many clothing swap companies were founded three or four years ago, the idea is hot. Freemeets, a regular event founded by Freecycle.org, attracts thousands of New Yorkers who are keen to walk in, take the clothes they fall in love with, and leave again. Some walk away with prized designer labels. There are no hassles and it surely justifies the petrol!
Ref: Financial Times (UK), 19 July 2008, ‘Second-hand, not second-rate’, S.Tang. www.ft.com See also www.swapstyle.com, www.visaswap.com, www.swaporamarama.org, www.swapsf.com, and www.clothingswap.org.
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Search words: fashion, second-hand, clothing swap, free.
Trend tags: Low cost, austerity
Customers Get Up Close and Personal
While some shoppers want second-hand clothes, others want to buy something made just for them. The trend for in-store studios where customers can watch craftsmen or artisans at work is already apparent in Japan. They can choose their favourite colours, materials and accessories in a range of items, from shoes (a snip at $US3,800) and jeans to jewellery. Being able to watch them being made is not only reassuring, but it helps the customer to become more attached to the purchase. They can also have their items mended on-site, which makes sense for a highly-priced item that you want to last. This is just about the opposite of swapping but probably makes the customer feel as good.
Ref: The Nikkei Weekly (Japan), 21 July 2008, ‘Retailers go for custom-made profits’, K. Sekiguichi. www.nni.nikkei.co.jp
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Search words: in-store studios, workshops, customisation, craftsmen, personalisation.
Trend tags: Customisation, personalisation
The home, household goods & services
Think Small and Go Local
A growing trend of households and small businesses generating their own electricity could see a shift in the balance away from the fossil fuel-run power plants that currently dominate the industry. As well as solar power cells, wind turbines and old-fashioned water wheels can take advantage of natural resources, but there is also the rise of innovations such as the bio-gas fermenter, for times when the weather can’t be relied upon. The fermenter turns agricultural waste, such as manure and chaff, into methane, which powers an electricity generator. The waste heat from the process is used to heat water for nearby homes. Using these techniques, the German town of Freimant is not only self-sufficient, but in 2007 generated a surplus of 2.3 million kilowatt-hours, which it sold back to the national grid. And this is not about some commune hoping to shut itself off from the world, but rather a modern, and quickly growing, movement. Nor is it simply about wresting control out of the hands of the big power companies. Generating power locally is simply more efficient. The average power plant loses 70% of the energy of fossil fuels during the conversion process through heat to the atmosphere or water cooling. The remaining power loses a further 7% from transmission lines.
Presently the large utility companies account for 67% of electricity generated globally. The International Energy Agency’s (IEA) World Energy Outlook predicts that even in its ‘alternative scenario’ (in which governments push hard for energy savings), the large power plants will still account for around 50% of the new power facilities coming online by 2030, while locally generated power will account for just 20%. But there are other predictions of an ‘alternative alternative’ scenario, in which governments will have a role to play in breaking the ‘carbon lock-in’. Denmark, currently the world’s most energy-efficient country, is leading the field in locally generated power. Denmark was the first country to introduce a ‘feed-in tariff’ to promote local energy, and now less than one-third of the country’s energy comes form big utilities. And Denmark isn’t the only one. Germany introduced a feed-in tariff in 2004 and now is a world leader in solar power, with 400,000 households and small businesses set up for solar power generation. Some countries with utility oligopolies may have trouble getting the big companies to let go of their stranglehold, but great opportunities for setting up locally generated power can be found in countries in the developing world, where the long distance power network is still under developed.
Ref: Newsweek (US), 21-28 April 2008, ‘Big Power Goes Local’, Stefan Thiel. www.newsweek.com
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Search words: Energy, power, power distribution
Trend tags: Energy crisis, peak oil, alternative energy
The Fifth Fuel
There is little doubt that if governments want to get serious about battling climate change, then energy efficiency, rather than simply alternative fuel sources, will have a huge role to play. Known by some as ‘negawatts’, energy efficiency can be just as effective in satisfying the demand for power, without the polluting by-products of traditional fuels. In fact the only by-product of efficiency comes in the form of savings in power bills and less money spent on power stations. The International Energy Agency, in its greenest prediction, thinks that two-thirds of emissions averted would come from greater efficiency. The McKinsey Global Institute (MGI) believes that if the world wishes to keep the concentration of greenhouse gases below 50 parts per million (a target advocated by many scientists), then energy efficiency would get us halfway there. It’s not just about the environmental aspect either, putting money into energy efficiency schemes could prove extremely profitable. Although big bucks would need to be spent up front – US$170 billion a year until 2020 – big investments would be expected to pay for themselves fairly quickly. So if it’s good for the environment and for the wallet, why isn’t everyone getting on board? To some extent they are.
The amount of energy used to create each dollar of output – or ‘energy intensity’ – is falling by around 1.5% per year globally. But according to the MGI there are still billions of dollars in opportunities still to be taken advantage of. One problem is that in the eyes of consumers, electricity and fuel is often too cheap to be worth saving. In fact, in countries or states where energy is cheaper, efficiency goes down with it. Conversely Denmark, the world’s most energy efficient country, has high power prices. Another problem is that taking advantage of potential energy savings can often be confusing and time-consuming for consumers. One tactic is to improve the kind of information available to customers. America and Europe both have labelling schemes for identifying energy-efficient houses and products – Europe’s is compulsory. But such labels are easily ignored by customers, who more often purchase in favour of price, appearance or convenience. Financial incentives are another way of going about it, with America offering tax credits to manufacturers of extra-efficient appliances and China plans to subsidise makers of compact fluorescent light bulbs. Other governments simply introduce new standards. Australia has proposed banning incandescent light bulbs altogether. Japan has its Top Runner Scheme, which identifies the most efficient appliances on the market. Competitors must improve on these efficiencies within four to six years or face fines. But all of these energy savings could be undermined by what’s known as the ‘rebound effect’. If the demand for energy falls, prices will come down too, and this in turn may prompt greater power usage.
Ref: The Economist (UK), 10 May 2008, ‘The elusive negawatt’. www.economist.com
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Search words: Energy, energy efficiency
Tomorrow’s tenements
Across America, thousands of suburban homes are deserted. The yards are overgrown, vandals have kicked in doors and the homeless are moving in. In Lee County Florida, where one in four houses has been vacated, burglaries rose 35% in the first half of 2007, while robberies rose 58% Even in nicer neighbourhoods, such as the Franklin Reserve of Elk Grove in California, where some houses once sold for more than US$500,000, the situation is the same. This rise in vacancies in suburban America has been for the most part attributed to the sub-prime mortgage crisis and subsequent foreclosures. But the problem is part of a much bigger shift in housing demand. For the past 60 years, the growth in housing demand has been in the direction of the suburbs, with people moving out of the city to avoid its high crime rates and poverty. During the 1960s and 1970s, moving to the suburbs was seen as a sign of affluence, but by the time the 1990s came around, the city was becoming gentrified. Television shows such as Seinfeld and Sex and the City promoted city living, while Desperate Housewives painted he suburbs as a place of soullessness and moral decay. And it’s more than just changing preferences, a changing demographic is helping the shift. When Baby Boomers had their young families, they made up more than half of all households, in 2000, families with children accounted for just a third of households, and by 2025, this is expected to fall to just a quarter. In addition to the rise of young single households, Baby Boomers with empty nests are moving back to the city.
With the rise and rise of petrol prices, car-based suburban living may not continue to be affordable either. The demand for urban living can be seen in the price of houses. 20 years ago it was considerably cheaper to live in the city centre than in the suburbs; now it is 40% to 200% more expensive per square foot of living space. It’s not just central cities that have seen this price rise. Suburban towns with walkable urban centres are also in demand. Builders and developers are attempting to fix the imbalance in demand by creating more urban living spaces and by building attractive urban centres in the suburbs. The demand is not going to be easy to fulfil, as US cities only increase their housing and commercial space by, at most, 3% per year. Meanwhile the empty suburban homes require of a solution of their own. The problem is that these massive suburban landscapes are hard to undo once they’re built. Some have been bulldozed and turned into parks or reforested, but this is unlikely in most cases, as purchasing entire neighbourhoods from so many different owners is virtually impossible. It’s more likely that houses on the outskirts of the city will be sold at bargain prices to lower income families and eventually converted into apartments.
Ref: The Atlantic (US), March 2008, ‘The Next Slum?’, Christopher B Leinberger. www.theatlantic.com
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Search words: Cities, housing
Trend tags: Urbanisation
The Rise of Modern Pet Pharma
Anti-obesity pills or psychiatric treatment for dogs may seem like a ridiculous idea, but these kinds of treatments for pets represent a rapidly expanding market. Surveys by the American Pet Products Manufacturers Association reveal that 77% of American dog owners and 52% of cat owners gave their animals some form of medication in 2007, up by 25% in both counts from 2004. And it’s not just the crazy cat lady. A trend towards humanisation – attributing human emotions and therefore emotional problems – of our pets has opened up the market. There are now more pets and more spending per pet, with Baby Boomers spending money on their pets as their children finish college. Those involved with the field of behavioural pharmacology say that drug therapies can treat problems that in the past have led to euthanasia for pets. Aggression is the leading issue that brings pet owners to seek help for (and the biggest reason for animals being left at shelters). Dogs are now being prescribed Prozac for the problem.
Separation anxiety is another major issue, with approximately 14% of pets affected. Eli Lilly have brought Reconcile, a doggy-Prozac in chewable beef flavour. Pfizer treats absent-minded pets with their Anapryl product, and in 2007 they released Slentrol, the country’s first canine anti-obesity medication. There are fears that this kind of treatment is more for the benefit of the owners than the pets. Some of these so-called ‘behavioural problems’ such as clawing furniture of guarding food are actually normal, and even healthy, for animals. Other problems, such as obesity, can be easily fixed without the use of diet pills. It’s believed that the causes of these mood disorders in pets are essentially the same as the causes for human emotional problems – faulty genetics, depressing environments and too little exercise. As pets are forced to share the same unhealthy environments as us, they inevitably develop the same problems. Critics of the pharmacological aids say that modern pet owners are increasingly trying to ‘sterilise’ pet ownership, wanting affection and play that they can switch on and off like a TiVo.
Ref: The New York Times, 13 July 2008, ‘Pill-Popping Pets’, James Vlahos. www.nytimes.com
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Search words: Pets, pharma, medicine, animals
The Future of Lawns
Observing the Earth from above, NASA recently made the startling discovery that in the US, lawns were the most prevalent irrigated crop, beating even corn. Working to challenge this obsession with lawns is a man named Fritz Haeg, who set up his program Edible Estates to pull up grass across the country and replace it with fruit and vegetables. Haeg describes the suburban lawn as ‘vegetative perversion’, with a monochromatic sheen achieved through fertilizers, pesticides and the use of precious water. Others have described the lawn as a totalitarian landscape that has as little to with gardening as floor waxing or road paving. People’s obsessions with their lawns are also time-consuming, with suggestions that more time spent on lawn care represents less time spent in the bedroom. Previously, keeping a lawn was only for the wealthy, as it was such a labour-intensive process. Then in the 19th century, the invention of chemical fertiliser and the lawnmower meant having a lawn was accessible for most. Now lawns are so widespread that the industry is worth around $8 billion globally. Supporters of the lawn, including those in the industry of lawn products, maintain that the lawns reduce run off, cool the environment, release oxygen and even dampen noise. They could, of course, make people happy but nobody seem to be thinking about this.
Ref: Financial Times (UK), 21-22 June 2008, ‘Turf wars’, Simon Bush. www.ft.com
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Search words: Lawns, grass, turf, gardens, water
Trend tags: Sustainability, the environment
Automotive & transport
Driven to Distraction
The American approach to traffic control, with heavy signage and specially tailored speed limits, is designed to make roads as safe as possible, but there is one man that claims it does quite the opposite. John Staddon, professor of psychology and brain sciences at Duke University, has compared the US and UK systems of road safety and found that excess use of signs and cautionary speed limits could be doing more harm than good. He claims that any sign on an intersection or stretch of road distracts the driver from the task at hand – driving. Stop signs are not only distracting, but teach drivers to be less observant of cross traffic. In addition, excessive use of signs, especially those that are known to be enforced, will mean drivers are looking out for approaching police rather than looking at the road. Speed signs can be just as dangerous.
The US speed limit system makes allowances for every curve or traffic condition, and adjusts the speed limit accordingly, sometimes changing the limit every few hundred yards. This kind of handholding promotes a reliance on instructions, to a point where drivers are no longer using their own judgement or even common sense. Statistics report that over the past 30 years in the UK, as traffic control has been simplified (by adding roundabouts and standardising speed limits), traffic fatalities have fallen by around 50%. And in the US, traditional intersections that have been replaced by roundabouts have seen a reduction in accidents of around 40% and a reduction in fatalities of up to 90%. Some European towns have gone to the other end of the spectrum, eradicating street signs and other traffic control methods almost completely. Drachten in Holland and Kensington High Street in London – high traffic, pedestrian-dense areas – are among those that have removed stop signs, stoplights and even sidewalks. The aim is to create and environment where both drivers and pedestrians are more aware and more cautious. The result is that pedestrian accidents are reduced (by as much as 40% in some areas) and traffic is actually slower.
Ref: The Atlantic (US), July/August 200, ‘Distracting Miss Daisy’, John Staddon, www.theatlantic.com
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Search words: Speed, speed limits, safety, fast, slow, driving, signs
Trend tags: Data visualisation
Smart Parking
In San Francisco, a move is underway to introduce a wireless sensor network that will hopefully put an end to the city’s parking and traffic problems. The system works through a series of small plastic sensors, one of which is attached to each metered parking spot. When the sensors are linked via the network, the result is a real-time database of parking spot vacancies. This information can be displayed to drivers through displays on street signs or available through the screens on smartphones. Drivers may also be able to pay by cellphone, meaning they won’t have to return to their car to top up the meter.
San Francisco will initially test 6,000 of its 24,000 metered parking spaces, with plans to go ahead with a two-year $95.5 million program to improve infrastructure. A hefty price to pay for parking, but it could actually save lives – in 2006, a 19-year-old was stabbed to death over a fight for a parking space. The parking system will also help relieve congestion. It is estimated that drivers searching for on-street parking make up as much as 30% of traffic in CBDs. A yearlong study of a district in Los Angeles reported that drivers looking for parking spots drove the equivalent of 38 times around the world, and in New York drivers searching for metered parking in just a 15-block area of Columbus Avenue drove 366,000 miles every year. Once installed, it’s hoped the wireless system will play an integral part in managing and improving city services. The sensors could be used to monitor the speed of traffic, identify traffic jams and even check air quality.
Ref: The New York Times, 12 July 2008, ‘Can’t Find a Parking Spot? Check Smartphone’, John Markoff. www.nytimes.com
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Search words: Parking, mobile phones, spaces
Trend tags: Digitalisation, connectivity, RFID
On-Board Weather
In-car technology is advancing to the point where cars can check the weather, fuel prices or even their own oil. These benefits are available thanks to the combination of high-speed cellular networks, onboard computers and GPS systems, which calculate a car’s location. Sirius satellite radio is behind some of the applications. By tapping in to data from credit card transactions, Sirius can identify (and deliver to drivers) the cheapest petrol prices across a country. They are also planning a weather service that will overlay weather maps directly over the navigation screen, meaning drivers can chose a route that will avoid storms or fog. An application from Hughes Telematics works in conjunction with a car’s onboard computer to check the car’s status. Drivers can then log onto the company’s website to check their oil levels, tyre pressure or receive an ‘all-clear’ report for emissions, which can be taken to the DMV.
Going forward, it’s expected that radio frequency identification (RFID) will have a bigger role to play in applications for drivers. Currently limited to tasks such as paying tolls, it’s expected that within 10 or 20 years, RIFD could advance to the point where it could help with the driving. Cars with the technology would automatically keep a suitable distance from the car in front, reducing collisions and therefore traffic jams. Data from the car such as speed, fuel status and destination would be sent to a central computer, which would use the information to monitor traffic. RFID could also be used in connection with a car’s registration, monitoring a car’s emission profile, number of trips and peak hour travel to calculate registration fees.
Ref: Popular Science (US), June 2008, ‘Help from above’. www.popsci.com; The Australian, 3 July 008, ‘Electronic tags to take the thinking out of life’, Chris Chapman. www.theaustralian.com.au
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Search words: On-board monitoring, controls, weather
Trend tags: Dashboards
Re-inventing City Wheels
In 2007, General Motors unveiled their plan for a battery-driven electric car that they hope will put them ahead of the pack – namely Toyota – in the electric car market. The Chevrolet Volt, as it will be known, is still in the planning stages, but GM hopes to have it in showrooms by 2010. If all goes to plan, the Volt will fully charge overnight from any electrical socket, and go 40 miles on a single charge. Which may not seem like a lot, but it’s estimated that three-quarters of Americans commute less than 40 miles per day. After the charge runs out, a small gasoline engine will ignite, recharging the battery on the go. Because of this engine, the car will be classed as a hybrid, but unlike other hybrids, the engine’s sole purpose is to recharge the battery – not power the wheels.This technology is not entirely new. Back in the early 1990s, engineers testing the EV1 hooked up a generator powered by a motorcycle engine, allowing the car’s battery to recharge on the road. The idea never made it any further, as at the time, the focus was on purely electric cars that burned no petrol at all.
The battery is the biggest hurdle to overcome with any electric car. Batteries with enough power to drive a car have until recently been far too large, too heavy and far too expensive to be practical. The advent of lithium-ion batteries has gone some way towards solving the problem, but creating a battery that is sufficiently lightweight, durable and, more importantly, affordable is still a gargantuan task. GM hopes to market the Volt under the Chevrolet brand – GM’s biggest selling, but also one associated with lower prices than its Cadillac brand. With the battery alone expected to cost in the realm of the high four figures, selling the Volt at Chevy prices is likely to result in a loss for GM. GM maintains that battery prices will come down and petrol prices will go up, but critics say that unless fuel reaches $10 a gallon (where now it’s $3 or $4), the Volt is not going to be a profitable business proposition.
Ref: The Atlantic (US), July/August 2008, ‘Electro-Shock Therapy’, Jonathan Rauch. www.theatlantic.com
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Search words: Electric cars, city cars, hybrids
Trend tags: Environment
India’s New People-Carrier
Another car making waves, for more than one reason, is India’s new Nano. Heralded as the cheapest car ever made, the vehicle from India’s Tata Motors is putting car ownership within the reach of millions of people. When the chairman of Tata Motor’s, Ratan Tata, set out with the vision of the Nano, he gave significance to the price tag – $3,000 is considered the minimum amount for a life purchase. In keeping to this envisioned cost, Tata Motors have had some advantages over foreign carmakers. For a start, labour, raw materials and overheads cost less in India than they do in, for example, Detroit. The fact that Tata has a steel plant in close proximity to their West Bengal Tata Motors manufacturing plant doesn’t hurt either. But this was only part of the equation – Tata went to great lengths to meet their desired end price, a lot of it being cut by losing weight from the car. This will also work out cheaper for owners in the long run, with the lightweight Nano getting a hugely efficient 47 miles per gallon.
The Nano has been praised for potentially providing independence and social mobility, but there are concerns about the effect of putting so many new cars on the road. An estimated 8 million Indians currently own cars, with a further 18 million able to afford one. However the release of the Nano could see the country’s potential for car ownership reach around 30 million people. In 2004, 92,618 people died in traffic accidents in India. This represents a mortality rate of 14 people per 10,000 vehicles – the rate in the developed world sits at around 2 per 10,000 vehicles. Pollution is also a concern. The Nano is designed to be fuel efficient (with carbon emissions on par with European standards), but any amount of emissions will add to the current pollution problem – especially if the cars sell as well as expected.
Ref: Wired (US), 23 June 2008, ‘India’s 50-MPG Tata Nano: Auto Solution or Pollution’, Daniel Roth. www.wired.com
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Search words: India, Tat, nano, low cost, cars, Innovation
Money, banking & insurance
Credit Where Credit’s Not Due
During a crisis, there is always a rush to blame the perpetrators and protect the victims. In the case of the credit crunch (not alas, a new muesli bar), the industry took two hits: a financial one and a loss of trust. Even the strongest bank cannot overcome a loss of confidence because money it is owed can’t be called in as quickly as the money it owes. While it was Freddie Mac and Fannie Mae, Northern Rock and Bear Stearns that took the headlines, it is the structural flaws in the system that should be addressed: misjudgement of risk, obsession with yield, and loss of oversight.Some claim the way bankers are paid ensures that they will take the risks for which someone else will ultimately pay. In other words, the profits are privatised; the risks are socialised. Or as Martin Wolf comments, there is a “mismatch between public risk and private reward”. In this case, it is tempting to blame the system, and to impose more rules about liquidity, capital management, pay structures, and to stop bailing out the losers. The trouble with that is that the real losers are the taxpayers, the ordinary people taking out the mortgages and car loans. When governments rescue failed lenders, they use public money (which they could have invested by privatising them). As The Economist notes, “if you cannot let firms fail in a bust, then you must contain them in the boom”.
Some transformation in the industry is likely to happen by itself. For example, the next crisis is unlikely to stem from the American housing market, because so many unregulated lenders have disappeared, demand for complex securitised products has fallen, and people again accept that house prices can and do fall. Moreover, banks will have to find a way to lure their investors and their customers back. They might reduce specialist borrowing, like self-certification mortgages in the UK, or home-equity lending in the USA, although less than half of their losses stem from the mortgages themselves. Most losses arise from so-called “amplifiers”, like the use of derivatives, fair-value accounting, and counterparty risk (banks hurting other banks), and overuse of different types of leverage.
Morgan Stanley says that investment banks will suffer more severely in this crisis than in any other period for 20 years. One study found previous banking crises reduced growth by 5% from their peak, and it takes more than three years to regain previous levels. Last, the Monetary Policy Forum claimed that, if American financial institutions lose $US200 billion, credit to households and companies plummets by $US910 billion. The risks are heady indeed. As Martin Wolf argues, when millions of innocent bystanders suffer like this, it must be “politically unacceptable in the long run”. Credit where credit’s not due.
Ref: The Economist (UK), 17 May 2008, ‘Barbarians at the vault. Paradise Lost’. www.theeconomist.com, The Economist, 19 July 2008, ‘Twin twisters’,
The Economist, 28 June 2008, ‘Tread carefully’; and the Financial Times (UK),
5 February 2008, ‘Why it is so hard to keep the financial sector caged?’, M.Wolf. www.ft.com
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Search words: financial, credit, crisis, monetary policy, pay, regulatory, banks.
Trend tags: Debt
The Trouble with Bubbles
Humans seem destined to create bubbles, even though they inevitably burst.We might call it “contagious optimism” or “irrational exuberance”. They are qualities not necessarily confined to financial risk-takers, but the effects of these bubbles are far-reaching. The dot-com bubble now seems long gone, the housing bubble has just burst, and more bubbles are blowing in this direction: burgeoning Chinese stock exchanges, gold (because of the US current account deficit), rapid growth in grain consumption, and alternative energy demands. The trouble with bubbles is they do not listen to the facts. Enthusiasm is contagious and, as long as more people become enthusiastic, it becomes almost impossible for others to resist.
Even contrarians can’t be heard.For example, a 2005 survey found San Francisco house buyers expected house prices to rise by 14% each year for 10 years. In fact since 2006, housing prices adjusted for inflation have fallen nearly 15%. It would be easy to blame financial institutions for lending money but, at its heart, there is still the pervading belief that we make money out of homes and stocks so we should keep buying them. One way to reduce bubble thinking is to offer subsidised financial advice for low to middle income earners. Real estate futures markets are another way for investors, as they would tend to reduce future housing bubbles. Overall, better and unbiased information would help to reduce the social contagion of unreasonable expectations. It works the other way too. When there is a recession approaching, it is worthwhile remembering the social contagion of negative expectations, as this exacerbates the economy and social problems. Negative bubbles should be popped too.
Ref: The Atlantic (US), July/August 2008, ‘Infectious exuberance’, www.theatlantic.com and Williams Inference Center (US), 17 December 2007, ‘A bubble economy’. R. Shiller. www.williamsinference.com See also Harper's (US) February 2008, 'The next bubble', E.Janszen. www.harpers.org
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Search words: bubble, dot-coms, venture capitalists, exuberance, contagious optimism, housing, defaults.
Trend tags: Bubbles
Mobile Banking, the Mass Affluent, and Other Trends
It was not so long ago that we might have laughed at the idea of Internet banking.Not so anymore, as branches shift basic transactions online and take on a more sales-oriented, advisory role. The next step is mobile banking but various consultancies predict greater use in a few years’ time, not tomorrow. Banks still have to make sure security is watertight, applications are standard, and they have a clear business case. Not only that, they have to convince the rest of us. Consumers expect much more of their financial institutions than before, particularly as they can readily compare their offers and talk to each other via Web 2.0 technologies like social networks or virtual worlds. (Gartner says 75% of financial institutions will be using Web 2.0 by 2012.) Thanks to new technologies, customers have a multitude of ways to pay for goods, including RFID smart cards, mobile payments, biometrics (fingerprints), and online payments. Banks do not always benefit from new methods, such as online payments direct to the seller.
They also have to continue to reduce costs by becoming more efficient, without sacrificing service to the customers they have already attracted. In many cases, inefficiencies result from historical legacy systems, such as inability to share customer information across all touchpoints.Banks are discovering a new niche in the market for the mass affluent who expect differentiated service, convenience, and rewards for their high-value custom – something the Internet is less able to offer. Even so, 30% of mass affluent customers prefer to go online, especially as they tend to travel more frequently. Woori Bank in South Korea offers a website, cleverly called “Two Chairs”, as well as premium physical services. HSBC offers HSBC Premier, Citibank has Citigold. Few banks offer mobile services, where the banker goes to the client, but this could be valuable to customers with little time. In some ways, the trends in banking are quite similar to those in retail, where the market has split into discount and luxury. Those who use the Internet and ATMs are the bottom end; those who visit hotel-style branches for personal advice are the top end.
Ref: Connexus (Aus) June 2008, ‘Through the looking glass’, S. Fhang Soh. www.abacus.org.au/publications.htm
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Search words: cost reduction, process efficiency, mobile payments, mobile banking, branch sales, transparency, Web 2.0.
Trend tags: Mobility
Look After Your Own
It is no surprise that as nations become more economically dependent on one another, they are becoming more nationalistic. Newsweek calls it the “new mercantilism”. Countries start to look after their own economic and political interests at the expense of others. Examples are Putin’s hold on natural gas in Russia and Hugo Chavez’s hold on oil in Venezuela, China’s artificially devalued currency, and the US-Peru regional trade agreement. The political foundations are weaker than the globalising power of the Internet and large companies. There are two reasons why the idea of free trade was so popular. First, it was thought that protectionism helped to worsen the Great Depression. Second, trade was seen as a way of combating communism, during the Cold War. Today, the world economy depends on each country feeling that it benefits from being part of it. If some countries start to pursue their own interests selfishly, others will follow. In some ways, it mirrors the way shoppers in developing countries exposed to global products eventually start to support their national brands. But the new mercantilism is more far-reaching.
Ref: Newsweek (US), 31 Dec/7 Jan 2008, ‘Goodbye, free trade; hello, mercantilism’, R. Samuelson. www.newsweek.com
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Search words: free trade, mercantilism, exports, Russia, World Trade Organization, China, steel.
Trend tags: Merchantilism, Protectionism
The World’s Biggest (Islamic) Bank
A new Islamic bank, Noor Islamic Bank, plans to spend between $US500 million and $US1 billion on acquisitions in Europe, Asia and North Africa. In this way, it aims to be the largest Islamic bank in five years. It is 25% owned by the Dubai government and 25% by the Emirate’s ruler. The growth in Islamic finance is not lost on the Bank of Japan, which recently joined the Islamic Financial Service Board. Thanks to crude oil prices, growing middle classes, and new financial technologies that create schemes for sharing profits without taking the form of interest, there is healthy demand for Islamic finance. It might also be another manifestation of the trend above, to look after one’s own in a global market.
Ref: The Nikkei Weekly (Japan), 10 March 2008, ‘Wave of Islamic finance swells’. www.nni.nikkei.co.jp. and The Dawn (Pakistan), 21 Jan 2008, ‘Dubai plans world’s largest Islamic bank’. www.dawn.com
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Search words: Islamic finance, oil prices, IFSB, capital flows.
Trend tags: Islamic finance
Healthcare, medicine & pharmaceuticals
Bringing the Doctor Back Home
One advantage of using telecommunications in medicine is the ability to treat people in remote locations. An extreme example of this was in 2001, when a surgeon in New York removed the gall bladder of a patient in Paris using robotic surgery. But true advances in telemedicine will move towards prevention rather than cure, and will be able to monitor people before they get sick and attend to them when they are. For example, BodyTel, in Germany, can measure glucose levels, blood pressure and weight using Bluetooth wireless technology so patients can monitor themselves at home. Honeywell gives patients similar abilities to monitor ECG, oxygen levels, and blood pressure, while doctors continually review the data. The value in this system is that patients can stay at home and remain independent and this reduces medical bills.
For patients who cannot monitor themselves, eg, Alzheimer’s patients, there are technologies to do it for them. For example, a smart cane can calculate the gait of the patient after, say, a hip replacement. Or sensors around the home, for example, on pillboxes or on a wristwatch, can help carers know what is going on when they are not around.There may come a time when well people wear sensors that will act as an early warning system for diseases. If diseases are detected at early stages, they are cheaper to treat and have less impact on the patient. On the other hand, if sensors are constantly detecting symptoms in a population, there will be reams of data to analyse and doctors will be under constant pressure to attend to data, rather than people. This means programming computers to analyse the data before alerting a doctor as needed. In the future, the doctor will call the patient, rather than the patient calling them
Ref: The Economist (UK), Technology Quarterly, 7 June 2008, ‘Telemedicine comes home’. www.theeconomist.com
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Search words: telemedicine, technology, specialists, emergency, chronic, acute, telehealth, prevention, sensors.
Trend tags: Telemedicine
The Trivialisation of Genetics
When Wilson and Crick defined the structure of DNA, it was inconceivable that companies would sell DNA testing. This is another example of marketing trying to make the most out of science (eg, neuromarketing), but not everyone thinks that testing is accurate or clinically useful. After all, not all tests are done in certified labs and just because genetic markers for certain conditions may be present, does not mean that a person with those markers will get that condition. It fails to consider that lifestyle, family history, and even undiscovered genes, will play their part too. Some of the American companies involved in genetic testing are Navigenics and 23andMe, but there will be others trying to muscle in for a share. There is an almost inexhaustible market for people wanting to know more about themselves, particularly the baby boomers who want to stay young as long as they can – and they have the money to do it.
Ref: Newsweek (US), 12 April 2008, ‘May we scan your genome?’, C. Kalb. www.newsweek.com
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Search words: Genetics, DNS, genes
Trend tags: Genetics
The New Coffee
The busy society is always on the lookout for a drug that will make it more alert, focused, and smarter. The obvious choice is coffee, which has become very fashionable, as well as effective, for waking us up. But cognition-enhancing drugs could be the next drug of choice, if they were made available. They are already used for Alzheimer’s, attention deficit disorder and schizophrenia but, like Ritalin and Provigil, healthy people could use them “off label” to boost performance. Also, like Ritalin, it is easy to get them from doctors or the Internet. Some people might ask whether if it is fair for some people to benefit from being smarter just because they can afford a certain drug. But many people already benefit from surgery that makes them younger or more attractive, so is there any difference? Pharmaceutical companies say that they want to minimise harm while maximising the freedom to choose, which is a compelling argument for people who need to perform and have the money to choose. This is why the smart money is on smart drugs.
Ref: The Economist (UK), 24 May 2008, ‘Smart drugs’. www.theeconomist.com
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Search words: coffee, cognition-enhancing, drugs, smart, viagra, performance.
Trend tags: human enhancement
Why Scientists Love Your Bacteria
One way to learn about a person’s habits is to sort through their garbage. In the same way, scientists are starting to analyse a person’s metabolites, the products of chemical reactions in the body. Metabolic changes in blood or urine can signal the presence of disease, and people with existing conditions have different patterns of metabolites from healthy people. With this vision, the Human Metabolome Project at the University of Alberta, Canada, released a database of the chemical patterns of 3,000 metabolites, 1,200 drugs and 3,500 food components in the body. Another focus of attention is the Microbiome Project, which collects faecal, vaginal, oral and skin samples to classify the genetic material of bacteria. For example, the bacteria in the guts of fat and thin people are quite different and, when obese people lost up to a quarter of their body weight, their gut bacteria changed too. This suggests that probiotics may be more important than, say, eating low fat food. One researcher at Imperial College London (UK) even suggests that looking for genetic links to chronic diseases may be less important than looking at the role of diet and culture, as these elements change the type and variety of metabolites. One metabolic marker may even have a role in regulating blood pressure. If this kind of information saves a life or prevents a disease, you might come to love your bacteria too.
Ref: The Economist (UK), 28 June 2008, ‘Signs of a long life’. www.economist.com
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Search words: metabolomics, metabolites, metabolome, microbiome, metagenomics, gut bacteria.
How to predict and prevent pandemics
One of the unfortunate findings of epidemiologists is that the countries that are most at risk of diseases are those who are least prepared to spot them. These are places of rapid population growth, agricultural and industrial changes, deforestation, heavy used of antibiotics, and there is contact with diseased animals. For example, Nigeria and India are high risk, but Australia is not. As a result of these risk factors, there is evidence that some old diseases – plague, rickets, and tuberculosis – are on the rise again. The World Health Organization reports 1,000 to 3,000 plague cases a year, carried by rodents, mostly in Africa. In Britain, up to 1% of children from ethnic minorities may suffer from rickets, mostly because they have come from sunny countries to a grey climate. Tuberculosis is more likely to be brought in by African or Indian immigrants who then live in poor and deprived areas where resistance to disease is lower. Migration ensures that even lower risk areas are still susceptible to pandemics so it is important not to think that modern life is immune to old diseases.
Ref: Popular Science (US), June 2008, ‘Predicting pandemics’. www.popsci.com
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Search words: HIV, pandemics, SARS, epidemiology, Amazon, Nigeria, antibiotics, deforestation, population, animal contact.
Trend tags: Pandemics
Airlines, hotels, travel & tourism
A Shift Away from the West
Emerging economies are set to become the new focus of the world’s travel and tourism industry. The fast-growing economies of Dubai, Russia, Brazil, India and China are now both tourism destinations and a source of newly-cashed up international travellers. Travel and tourism already accounts for around 30% of Dubai’s GDP, and the country’s rulers are pushing for even more growth. China is still a distant second behind the US as a source of tourism dollars, but the demand for travel in China is expected to quadruple in the next decade, as household incomes rise. Already, Chinese and other Asian visitors are overtaking the number of Western tourists to Vietnam – one of the world’s fastest-growing tourism industries. India is the other strong emerging economy in Asia, but so far tourism growth has been held back by the country’s poor infrastructure. There is a plan to remedy the problem and cash in on the tourist dollar by pouring 20 trillion rupees (around US$500 billion) into development over the next five years.
This shift away from the West could be seen as the third major shake-up of the tourism industry in the past 50 years. In the 1960s, the arrival of cheap airfares and package tours meant those with even modest incomes could not only travel further, but experience more with ‘all-in’ offers. Next came the Internet, which allowed travellers to cut out travel agents all together, booking flights and accommodation online. There are fears, however, that this boom in the industry is only a short-term gain. With the speed of development in emerging economies expected to be around up to three times that of the developed world, this rapid growth could destroy the natural resources that tourists are coming to enjoy.
Ref: The Economist (US), 17 May 2008, ‘A new itinerary’. www.economist.com
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Search words: BRICS, CHIME, travel trends, tourism trends
Trend tags: Power Shift Eastwards
International Tourism Trends
According to the United Nations World Tourism Organisation (UNWTO), global tourism is defying a slowing economic climate and is showing signs of growth. A strong world economy and pent-up demand following the 9/11 attacks saw a boom in the tourism industry between 2004 and 2007, with growth at 7% annually during those years. Since the last quarter of 2007, the economic climate has deteriorated, but tourism and travel remain strong. The UNWTO’s bi-annual World Tourism Barometer reports that international tourism grew year-on-year by about 5% in the first four months of 2008, with predictions for this to continue through the year. The main spenders in the industry for 2007 were consistent with previous years – Germany, the US, the UK and France still in holding the top four. But China is moving quickly up the ranks, overtaking Japan for the first time with a US$30 billion share of the market, which is estimated at around US $900 billion. Russia eclipsed South Korea to take ninth place. As destinations, the biggest growth was seen in the Middle East, Asia and Latin America. The UNWTO warns however, that although there are predictions for steady growth in tourism, demand could be slowed by economic and consumer reactions to rising food and oil prices. Climate change could also impact on choices for tourism destinations and activities, with accurate weather information becoming a more important part of holiday planning.
Ref: Financial Times (UK), 5/6 July 2008, ‘Global tourism defies slowing trends’, Harvey Morris. www.ft.com
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search words: Tourism trends, travel trends
The End of Corporate Travel?
Across the United States, the number of business trips is falling, and it’s not just the result of a slowing economy. In times of economic downturn, it is normal for companies to cut back on travel expenses, reinstating business trips when things pick up. It appears, however, that there may be a permanent drop in certain types of business travel. Instead of exhausting interstate and international trips, many managers are now staying put, linking up to other offices via advanced teleconferencing tools. The escalating cost of air travel prompted by a sharp rise in oil prices is part of the reason, but companies are also becoming increasingly aware of their environmental impact. Cutting out air travel can go a long way to reducing their carbon footprint and thereby presenting a greener image. A trend towards a better life/work balance means execs can appreciate the detrimental effect that extensive travel can have on their home lives, instead opting for solutions that can fit into their regular schedule. These solutions don’t come cheap – advanced telepresence systems such as those offered by HP and Cisco can cost up to US$300,000 each. However, when used regularly, these systems usually pay for themselves within nine months. But it’s not simply a method of reducing costs or the strain of travel. Research has found that meeting up more frequently in short bursts (even via video conferencing) is more productive than meeting occasionally for more intensive meetings.
Ref: Business Week (US), 2 June 2008, ‘The Waning Days Of the Road Warrior’, Michelle Conlin. www.businessweek.com
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Search words: Business travel, corporate travel, meetings, virtual meetings, virtual worlds
Trend tags: Virtualisation
Telepresence Trends
More businesses are turning to video conferencing instead of travelling for face-to-face meetings, but this kind of remote communication is nothing new, so what has sparked the increase? The key may lie in a number of technological advances that have been made in the areas of telecommunications networks, software and computer processing.
While video conferencing was always an option in the past, the reality was often a grainy, jerky image which did little to increase communication. Now it seems that technology has advanced to a point where remote link-up can become a reasonable substitute for meeting in person. This progress can be seen most obviously in the new telepresence systems offered by Cisco and HP. Telepresence rooms feature three giant curved screens, plus another screen for shared work, custom lighting and acoustics. The screens have a higher resolution than high-definition televisions and images can be magnified to allow closer inspection of products. Images of people on the screens are projected as life-sized, and researchers have found that employees using telepresence systems had the same chemical responses that they would in face-to-face meetings.
Outside of these high-end products there have also been developments. Online document sharing, wikis and Internet telephony mean meetings can be more interactive, and improvements to existing technology means the audio and desktop presentations in web-based meetings are more likely to be in sync. Analysts have predicted that this is not a short-term fix for the cost of business travel, but rather these tools will change the way that corporations think about work and travel.
Ref: The New York Times, 22 July 2008, ‘As Travel Costs Rise, More Meetings Go Virtual’, Steve Lohr. www.nytimes.com
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Search words: Meetings, virtual meetings, virtual worlds
trend tags: Virtualisation, Telepresence
Middle East Tourism Dollars
With out-bound travel from the Middle East set to generate big bucks in the future, many Asian countries are thinking hard about how to get a share of the market. However, tourism boards are finding they have to reconsider the typical image of a bikini-clad girl on a tropical beach in favour of campaigns that are more appropriate for Middle Eastern visitors. Travellers from the Gulf related that their top considerations when planning overseas travel are logistics, immigration policy and cultural sensitivity. It’s been revealed that Gulf travellers are more likely to go for family holidays and stay for longer, opting to rent apartments and larger rooms.
The peak time for travel out of the Middle East is from July to September, when people are trying to escape the sweltering summer temperatures. Malaysia was one of the first Asian countries to specifically target Middle Eastern tourists, promoting itself as a modern Islamic society and highlighting its friendly visa policies, luxury shopping and widely available halal food. And the result has been impressive, with 250,000 visitors from the Gulf touching down in Malaysia in 2007, up from just 60,000 in 2000. Indonesia aims to boost its number of arrivals by 50% through the introduction of a visa-on-arrival scheme for visitors from Oman, the UAE, Saudi Arabia, Bahrain, Qatar and Kuwait. Airlines are doing their part by increasing the number of flights to the region, and the numbers of visitors have increased in tandem. For others, bringing in these visitors is not just a matter of increasing tourism, but of building a loyal following among the Middle Eastern population. Singapore’s Banyan Tree Group is making its Phuket resort more attractive to visitors in the Gulf, before plans to build around a dozen properties in the Middle East.
Ref: Newsweek (US), 21 April 2008, ‘Definitely Not in a Bikini’, Alexandra A Seno. www.newsweek.com
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Search words: Out-bound tourism, in0bound tourism, Gulf States, Middle East
Trend tags: CHIME
Work, business & professional services
The Rise of the Digital Nomad
Sometimes what you are looking for is hidden right in front of your face. A case in point is the mobile phone.People tend to think of mobiles as just another technology but Internet and GPS enabled phones are changing how we live, how we work and how we think. The big picture is fairly clear. The future will be faster and more connected. There will be fast cellular networks connecting with a host of devices uploading and downloading information. This ubiquitous connectivity will allow us to work anywhere we want because people and information will be within easy reach. Thus offices will disappear and so too will ‘flesh meetings’. But I don’t think so.Mobile connectivity is indeed blurring the division between work and home and it is now physical time not physical space that is in short supply. However, business is inherently social and new ideas thrive on the close physical proximity of people.
Thus predicting the death of office buildings or physical meetings is probably an exaggeration. Similarly, whilst mobile networks and permanent connectivity may bring family and friends closer together this could mean that encounters with people and ideas that are ‘outsiders’ will become less common in the future. Equally, while GPS and camera equipped mobiles mean that everyone now has the potential to become a journalist or filmmaker this easy connectivity may also mean that our digital privacy is eroded. The future therefore looks like it will be the best of times and the worst of times.
For digital nomads many of the things that used to be done at home will be done in the office and vice versa. Home working will become more popular, partly because companies will want to reduce costs, but also become working from home allows employees flexibility. This has been talked about before, most notably in connection with telecommuting, but the difference is that fixed phone lines and dial up Internet still tied people to a specific location. The key point here is, I think, the fact that the phone isn’t merely a phone any more than the car was a faster horse. The ‘phoneness’ of phones hides the fact that they are subtlety changing almost everything in the same way that the car did. The comparison with cars is also quite interesting because while the car segmented towns and cities into work and home areas the mobile phone may be having the opposite effect. Hence we will still have jobs in the future but the where and the when will be left to the individual.
Ref: The Economist (UK) 12 April 2008, ‘Our nomadic future’. See also Economist Special Report on mobile telecoms 12 April 2008.
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Search words: Offices, mobility, wireless, mobiles
Trend tags: Digitalisation
Signals for the Foreseeable Future
The world is changing significantly but sometimes it is difficult to see how and why because we are drowning in data and it’s difficult to separate the signal from the noise. So what are some of the key trends that business should sit up and take notice of? According to Art Kleiner, writing in Strategy + Business, one of the key trends is a surplus of global capital, which is leading to an increased velocity of capital, which in turn will lead to faster financial bubbles. The specific problem here is that financial markets tend to overreact in the short term to bubbles so one needs to design a strategy that is constantly hedging against various potential problems both in terms of geography and sectors. A second trend identified by Kleiner is energy complexity.
From a strategy point of view the issue isn’t so much ‘which fuel?” but rather the ambiguity of choice. On the one hand ambiguity and complexity add to cost but on the other they are spurs to innovation. Third is participative risk. Things are more volatile than they used to be and organisations therefore need to think about risk in new ways. For instance, insurance and healthcare firms are asking their customers to own part of the risk implicit in their relationships.The fourth trend is strategic souring. We have entered a period where supplies, raw materials and even people are of critical strategic importance. For the first time since 1939 companies and countries face growing shortages of key raw materials and business models and relationships with suppliers are becoming more collaborative as a result.
The fifth trend is excellence as a differentiator. What Kleiner is getting at here is that all of the ‘low hanging fruit’ have already been picked and labour scarcity means that there will be a war to attract and retain top level talent. Hence being a ‘great place to work’ will matter like never before and how a company is run (in the broadest social and ethical sense) will be a key differentiator in the future.The sixth trend is Green Technology as the next Y2K. The idea here isn’t whether or not climate change is real. We will never know whether Y2K was a real threat or not but the threat of destruction was enough to become a catalyst for innovation and better housekeeping across the board. Climate change will be the same according to Kleiner. Whether it is real or not is beside the point. The threat will drive change from a risk management point of view but it will also become a spur for innovation more generally. The ninth trend is an IT renaissance driving cost savings and labour productivity and the tenth is consumer-centric digitalisation enabling metrics.
Ref: Strategy + Business (US) 22 January 2007, ‘Signals for the coming year’,
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A. Kleiner. www.strategy-business.com
Search words: Trends, Art Kleiner
Nine New Trends for 2008
A little while ago Wired magazine published a list of nine new trends driving business forward in 2008. Some of these trends are not exactly new and a couple may not turn out to be trends at all but they are at least food for thought. The first trend identified by Wired is the rise of the open source tycoon. The idea here is that in January 2008 there were more open source acquisitions than in all of 2007. Sun Microsystems bought MySQL, Nokia acquired Trolltech and Wal-Mart is developing an open-sourced approach to help its workers track their healthcare records. Traditional wisdom says that you cannot cash in on open source software because the ethos of open source is not based around financial gain, but perhaps not. Second up is social networks growing up. This is one I violently disagree with. MySpace is impressive from a membership point of view (the site now has 225 million members worldwide) but most social networks are unimpressive when it comes to financially capitalising their ideas. Perhaps this is a good thing too. After all, do you really want your friendships to be turned into commercial transactions? Facebook tried it once with Beacon and Social Ads and not surprisingly it didn’t work. Again, surely the point of these networks is friendship, not money?
Trend three is Green on the inside. The idea here is that whilst being ethically and socially aware is the thing to do these days the reality is that most companies still make money by doing business the old fashioned way. Moreover, a shift towards being green can hurt your sales and share price and the market is not currently rewarding businesses that are deep green. Despite this some companies are moving rapidly forward. Wal-Mart, for instance, is asking suppliers in the US to increase the energy efficiency of the products they supply by 25% over the next three years. Of course, given that Wal-Mart buys vast amounts of products from China where the rules are more lax means that this isn’t exactly a level playing field.Trend four is the invisible internet. This is all about the fact that electronic devoices are increasingly web enabled but the trend is towards predetermined functionality not open wen access. For example, you can’t browse the Internet on a Kindle but you can download books and magazines from the web. In other words, devices that do less sell for more than those that do it all. Trend Five is the rise of the instapreneur. Once upon a time it cost a lot of money to set up a store selling something. These days barriers to market entry are falling and the old idea that you need volume to support factories and shops just isn’t true anymore.
The longtail is a well-documented idea but the thought goes way beyond online and digitally based businesses. The long tail applies to making things not just selling them. Trend six is building better web advertising. This bores me silly although the growth of behavioural targeting frightens the pants off me. Trend seven is China. Everyone knows about China as a source of low-cost labour and manufacturing but China is also, increasingly, a source of finance and a source of upstream innovation and intellectual property. Trend eight is VC firms moving into seed funding and angel territory and trend nine is the human touch.This last trend is really interesting. Companies are starting to use people to filter information. The internet can do lots of things but critical thinking isn’t one of them. Hence the growth of firms like Brijit that use human curation rather than algorithms. Even Google is in on this. The search firm is planning to introduce something called knolls – a tool that allows human experts to write about certain topics.
Ref: Wired (US) April 2008, ‘Wired Business Trends 2008’. www.wired.com
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Search words: Trends
Is History a Good Guide to the Future?
According to the economist JK Galbraith, the majority is always wrong. If you hear that everyone is buying something you should thus ask yourself who is selling?Taking a long-term view this is undoubtedly correct and one of the reasons for this is that we tend to get caught up in the present and forget about both the past and the future. Things often run in cycles but individually and collectively we have great difficulty recognising a changing environment. In short, we assume that things will always be as they are now and cling to what we know even when it’s fairly obvious that things are changing.
Of course knowing precisely when to react is difficult. Saying that the US economy will go into recession in one thing but getting the timing right is quite another. As JK Galbraith also said: “Successful investing is the art of anticipating the anticipations of others”. This is difficult because the news and media are obsessed with the here and now and our short-term focus means it is hard to sift through the trivial details and see the bigger picture. Good forecasters have a very acute sense of history but the very best also know when its time to forget the past before it gets you into a whole heap of trouble. Age and experience come into play here, as does the discipline of patience. There are many trends around at the moment but we should remember that many of the most important drivers of change do not change very much or very often. When new trends do arrive they should be taken seriously but equally we should not all be seduced by things just because they are shinny and new.
Ref: Various including New York Times (US) 30 December 20076, ‘To Botch a Forecast, Rely on Past Experience’, P. Bernstein. www.nytimes.com Barron’s (US) 10 December 2007, ‘Major trends just keep on going’, D. Davis. www.barrons.com
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Search words: History, future, forecasting, predictions
Trend tags: Cycles
The New Model of Innovation
I’ve been writing about open innovation for a number of years and whilst it’s still too early to draw any firm conclusions about where this trend is going there are a few ground rules emerging about how companies can shift away from innovation as an activity conducted within fixed boundaries to one that is delegated to a fluid network of suppliers, specialists and customers. Open innovation (sometimes called distributed innovation or customer co-creation) is in many senses not new. Boeing, for example, has always built planes with many of the components being produced by and even invented by its suppliers. What is relatively new is being open to new insights and ideas from any source, including those of the final customer.So what are the hurdles in terms of co-created products and services and how can companies capture more value either directly or indirectly through the co-creation process? The first issue is that a company must structure a problem for people to collaboratively contribute to. Second, is the issue of attracting, motivating and retaining the right people to act as co-creators and it looks as though non-financial rewards are often the best way to do this. Clear rules, goals, leadership and conflict resolution processes are also important although this can be tricky given the distributed (and often virtual) nature of these teams.
Ref: McKinsey Quarterly (US) June 2008, ‘The Next Step in Open Innovation. www.mckinseyquarterly.com
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Search words: Innovation, innovation models, open-innovation
Trend tags: Open