Dear International Friend,
How can we learn early on what the next groundswell of productivity in our society will be?
One simple idea I picked up at the Jyske Bank Investment seminar in Copenhagen may be of help, but before I share it let me add how powerful simple ideas can be.
We have previously looked in these reports at how our society is in a sixth industrial wave fuelled by information. We have studied what this means to our well-being, business and wealth. We have also reviewed how the first industrial revolution was fuelled by water, the second steam, the third by the internal combustion engine, the fourth aviation and the fifth by electronics.
At the Copenhagen course I changed my mind about this after realizing (from what I read in the book Unleashing the Killer App (click the link to buy this book direct at Amazon.com) that there was an industrial revolution before the water wheel.
This era was the feudal era and was fuelled by the power of the horse. This era lasted for thousands of years and a big part of this was made possible by a tiny idea (copied in Europe from Asia), called the stirrup.
The Franks led by Charles Martel were able to use the stirrup to improve their attack on horseback. The stirrup allowed Martel's soldiers to strike the enemy with a lance without falling off the horse. This changed the conduct of war and introduced an era of the mounted cavalry. Later Martel created an entire social class (knights) so they would have sufficient income from the land to support the knights and their horses. This altered the social and political structure of Europe's society. To do this Martel took huge tracts of lands from the Church which also altered the balance between church and state. This shift led to the Pope crowning Martel's Grandson, Charlemagne, as the first Emperor of the Holy Roman Empire, a world order that lasted a millennium.
Imagine the economic impact! One small idea that totally changed business, investing, religion and politics.
Picture yourself as a businessman or investor then – at the beginning of this feudal era – having figured this out. How would you have changed your business and investments at that time?
The simple idea I gained at the Jyske seminar, may be as simple as the stirrup but could have as profound an effect on the future.
The idea is that TV and phone will drag the world into cyberspace! We will use increasingly powerful, smaller (and smarter) chips in phones and TVs. We will make them interactive with voice and gesture and the computers will even give vocal replies.
The idea came from Ian Pierson a futurist for British Telecom. He figures out where the information era is headed and helps direct the billions his company invests. He spoke at the seminar and pointed out that a huge area of opportunity today is in areas of convergence between the computer and communications. Pierson believes that within the next decade almost every aspect of our lives will be interfaced with a chip of some sort and that normally we will not even notice we are being electronically served.
He explained his belief by pointing out something so obvious we all know it, but may not have regarded the consequences. We all have a huge problem of interface. How can we handle the exponential increase of information we now receive? International E-Club advisor ( https://www.garyascott.com/eclub/ ) Steve Rosberg was with us at the course and he clarified the problem when he said, “It's inflation. As we get more and more data thrown at us faster and faster each bit of data loses value.”
Ian Pierson believes this problem won't be solved by man but by computers. The problem is created by computers and will have to be solved by computers. The human mind cannot handle this interface problem. Computers can.
Their will be two steps that take place. First we will move from using computers to using interactive TV and the phone. Too many people are afraid of computers because they are too user unfriendly. But everyone knows how to use the TV and phone. Second we will shift from the typed word to voice. Not everyone can type but most of us can talk.
These voice and gesture activated devices will be powerful in assessing your needs, sorting out data available and giving you a short list of useable information. You will no longer go to the net and ask a general question which may result in thousands of possible answers. You'll be able to ask specific, personal questions and get personal, specific answers.
This simple idea could change our entire social, economical, religious, political and economic structure. How?
One change will be the functional decomposition of companies. Many of the aspects of business that currently make companies a powerful social tool, such as human resources, information sharing, clerical, accounting, distribution, procurement, legal, sales, even R&D will be capable of being automated. Companies will simply not be needed. Computers will give the services to workers that companies previously provided.
Another change will be speed of change. In this scenario change becomes so rapid that experience becomes a liability instead of an asset! Businesses are a pool of experience commonly guided by a plan. As computers eliminate the current dynamics of time and space the inflexibility of plans will reduce the effectiveness of companies. Instead we will see highly flexible, loose knit, networks, linked by the net, that take on short term tasks.
This organizational shift will alter the dynamics of everything. Imagine the shift in political power for example. Imagine how a network of a thousand people can gain instantaneous and strong power. If each member in such a network can pass an idea to only ten people, three deep that small network can move a million people (buyers, votes, etc.) overnight. Small networks will be able to apply considerable pressure in very direct places at incredibly specific times, all at low cost.
Interactive TV and cell phones can also reverse the “Cycle of Knowledge”. For the past two hundred years this cycle has shifted from the individual as a general knower of many subjects to the individual as a specialist in just a few areas.
In fact we may be at the epoch of this specialist cycle now. This fact is confirmed in the Thomas Stanley Ph.d. book “The Millionaire Mind” (click link to order the book from Amazon.com) because the 22nd factor of wealth that 733 millionaires (that Stanley researched) felt helped them attain success is specialization. Stanley's book points out that there is even a strong negative correlation between do-it-yourself activities and wealth. He shows that the higher the net worth of an individual, the statistically less likely they are to be do-it-yourselfers in things such as mowing laws, painting homes, etc.
We can presume from this that those who are wealthiest spend the most of their time on a speciality which makes money for them.
But the vocal use of interactive, intelligent cell phones and TVs means that individuals will return to having more general knowledge. Specialists will not be so much in demand because up to date, relevant, less biased, specialized knowledge requirements will be filled on demand by computers.
So look for the cuddly home interface. This could be where the next big action is.
Is this where we are headed? Your comments, ideas and experiences please.
Since this era is not totally with us yet, time and space have not been that constricted. Merri's and my return trip from Copenhagen to North Carolina yesterday turned into a 26 hour trek. Nor is my computer ready to answer the 90 email messages that accumulated over the four days we were away. But I have a low tech solution. I'm headed for a nap in the hammock on the creek. Hopefully that's a pleasure we'll never outdate.
Until next message, good investing!