Dealing with the demographic dividend

As populations age, training and education become more important than ever.

“In the 20th century the planet’s population doubled twice. It will not double even once in the current century,” states The Economist in a lengthy article on how the world’s aging population is going to affect economic growth.

One of the most overlooked aspects of modern day economics is the changing demographics of the developed world, the aging army of baby boomers has been effectively ignored by policy makers and voters alike and now we’re about the see the consequences.

Japan is the case study as the country is well ahead of the pack with an rapidly aging population and the indicators aren’t good.

Amlan Roy, an economist at Credit Suisse, has calculated that the shrinking working-age population dragged down Japan’s GDP growth by an average of just over 0.6 percentage points a year between 2000 and 2013, and that over the next four years that will increase to 1 percentage point a year.

Despite that drag on growth, the Japanese are still living quite well and could be showing that an economy can grow old gracefully and productively.

The key to doing that is to have a well educated, skilled and productive workforce. An efficient health system that ensures older workers stay fit enough to work doesn’t hurt either.

What The Economist illustrates in its story is that some countries are going to perform better than others as their workforces age. Those who’ve neglected their education systems and workforce skill bases are not going to do well.

One can’t help but think the ideologies that gripped the Anglo-Saxon countries in the 1980s that saw skills being discarded, investment neglected and education cut are going to have a high cost on those nations over the next twenty years.

Burying Google Plus

If Google+ is to be buried, it could be good news for Google’s other properties like local and mobile search

The announcement that Vic Gundotra, the executive responsible for Google+ at the search engine giant, is leaving the company has lead to the widespread assumption that the troubled social media platform is dead.

It’s not an unreasonable assumption that Google Plus is dead; the company’s trait of corporate attention deficit disorder means the project is likely to die of neglect without a top level executive supporting it.

Should Google Plus be dying, this won’t be bad news for some of the company’s other products, the enforced integration with the social media service irritated users, –particularly on YouTube — while reducing functionality for platforms like Google Places.

Google Places, or Google Plus for Business as it was clumsily renamed as part of the integration, could be the great beneficiary of removing the distraction of the social media service with renewed focus on local search.

Regaining focus

Losing focus on local and mobile search has been the most damaging effect from the Google Plus experience and renewed efforts in those fields will take on Facebook while filling a gap in the market.

It’s also unlikely that the entire ‘identity service’ will live on with those features permeating through the company’s products.

Of course, it could be that Google Plus isn’t dead at all; we’ll have a better idea of where it’s going to go when we see the level of commitment from senior management towards the product, although the appointment of a relatively junior executive doesn’t seem to be good news for the platform.

Moving on from Google Plus is an opportunity for the company to refocus on neglected niches, it could be a good result for the company’s shareholders.

NASA and the five technologies that will change business

The Chief Technology Officer of NASA’s Jet Propulsion Laboratory discusses the technologies that will change business.

What will be the next five technologies that will change busines? CITE Magazine has an interview with Tom Soderstrom, the chief technology officer at NASA’s Jet Propulsion Laboratory on what he sees as the next big game changers for business.

The list features many of the topics we’ve discussed on this blog; data visualization, the Internet of Things, robots, 3D printing and new user interfaces.

NASA’s Jet Propulsion Laboratory is a good place to start when looking at what technologies will become commonplace in business as the organisation is testing the limits of modern engineering.

When should a founder step down from their business?

Letting go of your business can be a wrenching task for a business founder as Viocorp’s founder Ian Gardiner describes.

Earlier this month, Sydney video streaming company Viocorp changed leadership with founder Ian Gardiner stepping down as CEO.

For Gardiner, the decision was tough and in a blog post he described how the company was founded and grew and why it was time to step away. That decision though was not without some pain.

I have nurtured and loved this little startup as it has grown up like one of my children.

And like my children it can occasionally be frustrating, difficult and highly erratic and unpredictable. But most of the time it is fantastic and hugely rewarding. And I love it with a passion that is hard to describe.”

However children one day grow up and leave home. Viocorp is not a start-up any more. It is a serious business with massive potential. And I feel that my skills as a product innovator and fire-starter are not the ones that Viocorp needs for this next stage of our journey.

I spoke to Ian Gardiner in a noisy Sydney Cafe in February for the Decoding The New Economy YouTube channel shortly after he’d made the decision to step down as CEO where he elaborated on the reasons for the change.

“I ended up getting further and further away from the stuff I’m actually good at,” he said. “You end up as the founder and entrepreneur in a place that is not good for anyone.”

“As a result of that the business doesn’t go in the direction you want.”

The right manager for the job

Gardiner’s decision illustrates an important truth about business; different management skills are needed at different stages of development.

A good example of this was with the corporate slashers of the 1980s – CEOs like GE’s Jack Welsh and ‘Chainsaw Jack’ Dunlap here in Australia were the right men to shake moribund organisations. A decade later both were out of favour as the needs of the business world and their companies had moved on.

Similarly the skills that are needed to found and grow a startup are very different to those required to steer a more mature business. This is why Facebook’s experiment with retaining founder Mark Zuckerberg as CEO of a hundred billion dollar company is so fascinating.

With Viocorp, Ian Gardiner and his investors have made a very mature decision about where they see the future of the business, as the now retired CEO told me earlier this week: “The punchline is that I’m happy about it, and very excited about the future of Viocorp.

Playing the startup lottery

Building a startup is not for everyone as Reuters’ Felix Salmon reminds us

Silicon Valley is in the grip of a mass delusion says Reuters’ Felix Salmon in a blog post that dissects the reality of life as a startup founder.

The Most Expensive Lottery Ticket in the World starts with nod to Gideon Lewis-Kraus’ No Exit: Struggling to survive a modern gold rush that examines the harsh truths and brutal realities of building a new business.

Salmon though goes further in skewering some of the myths around startups; pointing out that with 90% failure rates not everyone can be ‘killing it’, yet few startup founders will admit their venture are doing anything else but crushing the market, despite the mantra of ‘celebrating failure.’

Possibly the most telling point Salmon makes is on the myth of the engineering entrepreneur, the truth is most coders value stability over the uncertain life in startup.

There is no reason whatsoever to believe that computer engineers make particularly good entrepreneurs. Quite the opposite, in fact: engineers tend to do quite well in structured environments, where there are clear problems to solve, and relatively badly in the chaos of a startup, where the most important skills are non-engineering ones, like being able to attract talent and investors. No Exit makes it very clear that the life of a startup founder is a miserable one, and that engineers are invariably happier when they’re working for a big company.

Life in a startup, or any small business, can be miserable if you don’t have the skills – and most importantly the risk appetite – for doing your own thing. This is a point often missed by those hyping the start up world.

Salmon’s piece is a good read and it illustrates that founding a business or taking the risk of working in a startup is not for everyone. It’s a timely reminder for anyone looking at liberating themselves from their cubicle and making the jump into self employment.

Three screens, four screens, infinite screens

The three screens idea of media consumption that was cutting edge five years ago now seems rather quaint.

This morning I had the opportunity to interview designer of the Fitbit, Gadi Amit, ahead of his visit to Sydney next month.

I’ll have the full interview written up in the next couple of days, but Gadi made an interesting point about not being in a ‘four screen world’ anymore, but in one where there’s infinite screens ranging from wearable glasses and watches through to smartphones and intelligent signage.

A few years ago the concept of the ‘third screen’ came into use when we started talking about the smartphone supplementing the PC and the TV, it quickly morphed into four screens as the tablet computer appeared.

Now the five year old idea of limiting ourselves to three screens seems quaint when there doesn’t seem to be any limits in the way we can view information.

The end of the three screen theory is an interesting illustration on how quickly technology is moving, it also shows how rapidly business is changing.

When the connection drops out, will your iKettle work?

If the Internet of Things is to be trusted by households and industry, it’s essential that systems work when they’re disconnected.

During the dark days of the Tech Wreck, the poster product for the heady excesses of the Dot Com era was the connected fridge.

Today it could be the iKettle that marks the height of the Internet of Things craze, a kettle you can control from your smartphone.

While the app doesn’t automatically fill the kettle; it does allow you to turn it on, schedule times and control the water temperatures.

The problem though is what happens when your kettle or phone can’t connect to the internet?

Burning data centres

Over the weekend, Samsung customers learned what happens when a connected device can’t connect when a fire in a South Korean data centre triggered an outage that prevented the company’s smart TV, Blu-Ray player and phone customers from properly using their equipment.

It would be really irritating if you couldn’t boil a kettle because your internet was down, however the more serious question is what happens when your home’s smoke detectors can’t connect? Or when your smarthome or connected car can’t authenticate your identity and locks you out?

Securing the IoT supply chain

For industry, the problems are even more pressing; in the not too distant future a truck carrying perishable goods may well have its deliveries refused by a customer if the cargo has lost connectivity.

In life or mission critical applications, relying on connections that may not be dependable could have disastrous consequences.

While the iKettle might be a bit of gimmick, it raises some important issues of what happens should your internet connection go down.

If the Internet of Things is to be trusted by households and industry, it’s essential that systems are robust and maintain operations when they’re disconnected.

Do you like your rights?

Liking a brand’s Facebook page cost you your right to sue which is a risk to the social media service

Could liking a brand’s Facebook page cost you your right to sue?

The New York Times has a story on how corporations are subtly changing the wordings on websites and social media pages in an effort to make it harder for customers to challenge the business in court.

It’s quite cheeky attempting to strip people who ‘like’ a Facebook page of their rights to take action against a company, it even strikes at the heart of building an online community around a brand.

The whole point of accumulating real life followers behind a brand’s social media presence is to create a band of fans; by creating suspicion, business destroy the goodwill behind that exercise and possibly render it useless.

It will be interesting to see how Facebook react to this behaviour as intimidating users and discouraging them from liking brands is a direct threat to their business model, it’s hard to see them not changing their own terms to make this corporate behaviour a breach of their own terms of service.

For consumers though it’s a reminder that corporations, at least those who operate on twentieth-century mass market principles, aren’t really their friends.

Update: Since posting this piece, General Mills has backed down on its policy but the point still remains that unfair and over legalistic terms and conditions threaten social media platforms.

Peak Google and the limits of internet advertising

The warning that online advertising revenues may have hit their limits has huge consequences for the internet industry.

Last week, Google’s share price slumped on news of poorer than expected revenue results and website Asymco has a detailed examination of how the company’s growth might have reached its limits.

Asymco’s warning to the online advertising industry is clear with the warning that revenues might start to decline in 2016.

That online advertising may have reached its peak means even an even more uncertain future for businesses rely on those revenues, and times have been tough for those sites in recent years as returns have fallen.

At the same time online ad spending seems to be peaking, print advertising revenues in the United States dropped a further 8% last year with income at now at 1982 levels. It seems publishers can’t win either way.

So its now wonder that online services like Google and Facebook are looking to payment systems and other ways to generate revenue, for online publishers things are even more problematic.

What is clear is the advertising driven revenue methods that work so well for the broadcast industry aren’t working for online publishers and quite possibly other internet based businesses as well.

The online industries need a David Sarnoff to figure out a model that works.

 

Smarthomes come of age

The internet of things isn’t new, it’s just the technology has become more accessible

“After four decades the smartphone comes of age,” proclaims Micheal Wolf in Forbes Magazine.

Wolf is right to a point but he misses the key reason why the smarthome, or the entire internet of things, has become accessible – the technology has simply become affordable.

It was possible to build a smarthome two decades ago, but it was fiendishly expensive and only a few rich people could afford the technology. Today that technology is cheap and easy to install.

This is the common factor with all aspect of the Internet of Things, connecting devices has been possible since before the internet became common but it was expensive and cumbersome so only the highest value equipment – such as oil rigs – was connected.

Now it’s inexpensive and simple to connect things, people are doing it more and that is why there’s a range of security and privacy issues which weren’t so pressing when it was only a few obscure industrial devices that were wired up.

We aren’t inventing the wheel with technologies like the internet of things or big data, they already existed – they are just more accessible and that’s what’s changing business.

Buying into the Internet of Things

Blackberry and Zebra Technologies buy into the Internet of Things as part of a push into a growing industry

Following Google’s acquisition of smarthome startup Nest in January, it was clear that 2014 was going to be the year that the Internet of Things dominated corporate takeovers.

This week has shown that with Blackberry announcing a stake in medical technology firm NantHealth, obstensibly as an Internet of Things play as CEO John Chen explains;

The NantHealth platform is installed at approximately 250 hospitals and connects more than 16,000 medical devices collecting more than 3 billion vital signs annually. Think about the possibilities when an enormous amount of data and computing power is accessible to doctors in the palm of their hands.

As Chen points out, the possibilities for this data are huge which raises questions about the privacy and security issues for patients along with the importance of having stable software and networks.

The other big Internet of Things acquisition yesterday was Zebra Technologies buying Motorola’s enterprise division for over three billion dollars, again the buyer cited the opportunities in connecting machines.

An interesting aspect is these acquisitions aren’t being made by the big players – Cisco, Google, Microsoft or Apple – but by smaller, but still substantial, players. It shows just how wide the Internet of Things’ applications are.

Blackberry and Zebra won’t be the only big acquisitions this year.