Month: March 2019

The news these days is mostly about the train wreck that is Brexit, the controversies swirling around Donald Trump, the election rhetoric from India and Thailand, the chaos in Venezuela and other such high profile leadership debacles and debates. I’ve started to wonder what all these politicians and so-called leaders actually do for the benefit of their country and its citizens.

The thing is, being the prime minister or president of a country (or even lower down in the order, being an elected representative of any sort) seems to have become associated with power, with being able to drive the agenda that the individual is aligned to and with being very selective about recognizing the will of the people.

You’ll notice all of the examples in my first line come from countries that purport to be democracies. I’m excluding China for the moment from this train of thought, although I’ll come back to that in a bit.

So, here’s the thing. In most of these countries, we, the people, elect these leaders. The funds that allow them to be paid and to do whatever they do come from our taxes (for the most part). Therefore, according to me, they should be set up to serve the people, not lord it over them. Right?

Let’s examine that in a bit more detail – what does a government actually provide its people? Broadly, it can be defined as a framework and facilities for living your life. So, there’s defined laws that protect people’s lives, livelihoods and property. There’s infrastructure in terms of roads, public facilities, some kind of central bank reinforcing the rules around money, armed forces and civil defence forces of various sorts to provide protection. Governments deal with other governments and make some rules around how people or markets situated in different countries interact with each other, how easy it is to get into and out of other countries, trade with them, hire people from them and so forth. Also, in most countries, there is some kind of welfare net to take care of the unemployed. All of this is designed to allow people to live their lives freely, enjoy their rights while being conscious of their duties and generally live in a state of security and peace of mind.

If we go back a few thousand years in history, those needs were met in different ways. There was a feudal society where your feudal lord provided all of those things, in a way, but exacted a price in terms of having rights over your property, cattle and often even your life. Which wasn’t great, obviously, if you were at the lower end of society where you didn’t get much out of the system but got exploited by everyone above you. If you look at America about 200 years ago there was very little rule of law – everyone carried a gun and if you had a difference of opinion or a point of law with someone (like cheating at cards, for instance) you expressed yourself with bullets. If you were transporting goods a long way, across countries on the Atlantic ocean or over land across the American continent, there were pirates, highwaymen and others quite keen to part you from your property. Often when you got to the other end you were at the mercy of the buying party because it was too isolated a place to be able to feasibly threaten to take your stuff back, so you had to sell even at poor terms.

Is the world today much better? We may not have a feudal society but more and more, we’re seeing politicians dividing society with their political planks – using religion or race or outlook as a convenient basis for defining tribes and drumming up support. If you happen to belong to one of the “us” tribes then everything is fine, but if not you’ll find, slowly but surely, that you’re disenfranchised and discriminated against. We have countries in which delusional, misguided or malevolently inclined people can get hold of highly dangerous weapons and wipe out dozens of people before anything can be done to stop them. We have two plane crashes that can be attributed to poor administration of aircraft certification and training procedures rather than natural causes or pilot error – which fall into the province of civil aviation boards that are government departments. We have a complete mess over Brexit in the UK, a demonetization disaster in India and a record breaking government shutdown in the US. We don’t know who is the legitimate president of Venezuela but we do know the economy is in the toilet and people don’t have their basic needs of food being fulfilled. We have Russia annexing Crimea and nobody seems to care, but the moment there is any kind of unrest in an oil producing nation the whole world wants to get involved.

Did the people in any of these countries ask for this stuff to happen? Is this what they wanted when they paid their taxes?

We may all want different things and in the normal course of life, we’ll figure out how to get them. We don’t need so much government and we definitely don’t need the entire apparatus of politics leading up to the selection of a government.

It’s time for people in democracies to stop focusing on which political party or politician to vote for. It’s time to start defining expectations for government – as paying clients for a service, we need to define what that service should be, how it makes priority calls between different customer groups and how, overall it serves the greater good of all.

One last word here about China, which gets a lot of stick for not being a democracy. True, it isn’t a place where people get to choose who runs the country, but somehow, the system has, for about 3 decades now, delivered governments that have run the country extremely well by anyone’s standards. The economy has grown, infrastructure is the envy of most countries, per capita GDP has grown, entrepreneurs have thrived and the vast majority of people here are extremely proud to be citizens of China. While certainly you can argue that the leaders of China are very powerful indeed, their focus and efforts seem to be on doing stuff that’s good for the country rather than displaying their power. Perhaps they’ve understood the concept of leadership being a responsibility to serve, something that has escaped the attention of most leaders in the so called democracies on our planet. Anyway, I recognize that this system isn’t ideal and I’m not advocating that we abandon democracy and embrace a one party state, just saying that democracy isn’t as democratic in its output as we all think it is.

Governments are meant to serve the people. Not the other way round. If they fail at that purpose perhaps we should examine the option of privatizing the key services that a government provides. Security, infrastructure and financial and legal frameworks all exist because we agree that they do – we don’t necessarily need a government to enforce them. Blockchain is a great example, although far from being mature enough to put a lot of applications on it. Privately built infrastructure that levies fees for usage, decentralized security services that any citizen can leverage… all of these things are possible and entrepeneurs are starting to think about them and do them. When most of these things become self-regulated / private enterprise services, perhaps we will see someone actually bidding for the right to run a country for 5 or 10 years, promising certain KPIs and having a management contract with a bonus attached to it.

What should we do in the meantime? I feel like it’s time for the politicians to respond to what people really want – almost like a charter of expectations that citizens vote on and then present almost as some kind of brief for anyone who’s willing to do the job. It could be a single political party that responds, it could be a coalition of parties or even politicians across parties. Perhaps it could even be regular people stepping up to the plate and putting together a convincing team and resources to do the job.

Sometimes the best way to think disruptively about something is to try and imagine it from a completely different perspective – to which end I was trying to imagine what an alien might think some of the oddest human practices and beliefs are. Here we go…

Money and property ownership

Money is one of the oddest things you humans have ever invented. It allows some people to be very rich and have the ability to acquire things beyond what they can really consume – while some people really need to consume something but don’t have the means to acquire it. If you go back to the beginnings of your world, food and shelter were your most basic needs. Food was available and free in nature, as was shelter – but in limited supply that ensured a natural limit on population.

In your world today, there are often situations where a certain group of people needs food or shelter, there is surplus food and shelter available for use, but your rules around property ownership and money prevent it from being used by the people who need it.

Money itself is a neat idea but it needs to be applied to non-necessities. You cannot withhold food and shelter from someone who’s starving or homeless just because they don’t have money. You can withhold a smartphone, car, software or some of the higher order products of life, but not the necessities.

The second element of that which needs examining is the concentration of wealth. If 8 individuals on Earth own as much as the bottom 50% (that’s 3.5 BILLION) of your rapidly growing population, clearly that is an imbalance that needs to be corrected. How? There are many ways – perhaps by increasing tax rates for any income or wealth beyond what is considered a healthy maximum and making that money available for public benefit. Another way is to limit what can be inherited, thus ensuring that the families of the rich do not inherit a permanent, unbalanced advantage. (Infographic from Statista, backlink here)

It is heartening that certain individuals on your planet – notably Bill Gates and Aziz Premji – devote a large part of their resources to helping other people. Nonetheless, it is clear that the vast majority of people with more resources than they need tend to hold on to them rather than redistributing them to those in need.

Why would people work hard then, you might ask? The answer may lie in still allowing for a gap between the ability to have the means to exist at a basic level of human comfort and to have access to finer things in life. Everyone should have access to the basics but only those who go beyond and create greater value are rewarded with the ability to consume non-necessities. Nobody is left with so much purchasing power that they can never use it within their lifetimes, so there is a cap on maximum wealth and income and the rest is used to fund the basics for everyone else.

The camera industry has suffered more dramatic changes than most others. First, from basic single plate exposure photography to film, black and white to color and then finally to digital photography. Recently, I came across this chart that shows we’re not done with tearing up the industry and throwing it away – the decline in sales of cameras ever since smartphones came around. There will always be a demand for cameras because there will always be professional / expert photographers who want something more suited to their skills, but it’s safe to say that the consumer boom in cameras that digital photography started has now dissipated completely.

Which led me to this next chart on what else the smartphone has replaced.

The multipurpose nature of smartphones and the fact that people always have them handy are driving the integration of a lot of capabilities into one device. Some of the things we’re not measuring in the same way because they’re not hardware replacement are already happening – credit cards and cash, for instance, becoming more electronic with Google Pay, Apple Pay, Alipay and Wechat Pay, for instance.

Most of the photography companies today seem to have moved into related businesses (there have been a few mergers as well – Konica with Minolta, for instance). Also, many of them are clearly struggling as their revenues went down and haven’t managed to replace camera sales with their new lines of business quite as successfully.

Specialist GPS companies have the same story to tell. Garmin in 2018 has still not risen back to its peak revenue from 10 years ago. Apple discontinuing the iPod is a sign of what happened to the MP3 players.

What could all these companies have done differently? I’ve seen 3 broad strategies:

1. Let the disruption happen but focus on the consumer need for a standalone product
2. Be the disruptor
3. Join the disruptors
4. Leverage the technology you own for new applications – going from cameras to industrial imaging and so on

The first strategy hasn’t been very successful for anyone – although many of the companies survive it’s very clear that they’re still far below their peak revenues from 10-20 years ago.

Apple was the best example of the disruptor – moving quickly to integrate more functionality into the iPhone and iPad and not worry about the impact it had on other businesses.

Leica is an example of joining the disruptors – putting its lenses as OEM into Huawei phones – Karl Zeiss did the same thing with Sony phones many years ago but unfortunately they picked the wrong horse to back and Sony was never a leader in smartphones.

Canon and Konica-Minolta seem to be focusing on related diversification in their annual reports but again, their revenues haven’t grown beyond their digital camera heyday.

The reality is, when something as fundamental as the smartphone comes along, it is going to disrupt a lot of industries – simply because consumers can now make one device do the job of many.

I don’t doubt that there was a moment in the life of each of these companies when it had a chance to recognize that the future was going to be vastly different and they had to make some big changes to get ahead of it, but I think it must have been really difficult to know what to do. What management consultant would have dared to suggest to Canon that they should buy a smartphone company or sell their technology and lenses to one, way back in 2008? And what company CEO would have dared pay heed to that suggestion?

That’s the problem with disruption – it’s easy enough to see after it’s happened. When it’s still in the near future it can be hard to recognize and even harder to know how to deal with. Even if you can figure out a way to deal with it, it may not be a particularly easy or comfortable solution.

Back to the original topic – what will smartphones disrupt next? Personal computing seems like an easy guess, given how screen sizes and processing power are growing. Hearing aids, perhaps? At least for people with less serious problems, a combination of a good earpiece and software through the phone could deliver a good workable solution at a fraction of the cost of conventional (expensive) hearing aids. As phones acquire their own AR / VR hardware capabilities perhaps many aspects of modern living will be subsumed into their capabilities.

And one last thought, what’s likely to come along and wipe out smartphones in the future? It might seem a bit too soon, but if you’re working at one of the phone companies, worth thinking about starting now.