Sunday, April 26, 2015

Things are a changing

Rambling thoughts on rainy spring day...

For those who think change happens to everyone else ......

Disruptive technology :
is a tiresome cliche, as every Twitter/ AirBnB/ Uber/ Skype/etc. wannabe start-up declares itself disruptive.
 That the vast majority of self-congratulatory start-ups are over-hyped and derivative should not distract us from the larger reality that some technologies do in fact disrupt how things are done.

Fossil-fueled mechanization, for example, turned an overwhelmingly rural farming society into a highly urbanized services-dominated economy.

In the more recent past, CraigsList single-handedly turned the newspaper industry from an immensely profitable license to print money (via costly classified ads) to a struggling sector with an unclear future.

Digital file-sharing turned the $14 billion music industry into a $7 billion industry.

And now driverless vehicles are poised to disrupt the taxi and trucking sectors in ways few predicted.

The core idea of Disrupt or be Disrupted is that every sector and industry that avoids being disrupted just becomes a fatter target for disruption.

Higher education is a prime example. The industry has successfully staved off disruption by maintaining a lock on credentialing/accreditation--the famous signaling value of a college diploma, which verifies nothing about what the student learned or knows.

Now that student loan debt is $1.3 trillion and the administrative bloat of higher education can no longer be obscured, the industry is becoming a fatter, juicier target for massive technological disruption by the day.

As I outlined in my book The Nearly Free University and the Emerging Economy, it is not that difficult to lower costs by 90% and improve the actual education process.

Employers should receive more than an increasingly worthless signal--they should be offered an accreditation of each individual's actual skills and knowledge. This is self-evident, but impossible in the current cartel-state arrangement.

Healthcare is another sector with bloated costs and protected fiefdoms that is ripe for fundamental disruption. Reductions of 50% or more that lead to better overall health do not require whizbang science fiction advances; simply eliminating the paperwork and cartels and making patients responsible for their care and the costs of their treatments would be enough to unleash a disruptive revolution.

What few in these protected industries dare admit is the state/cartel cost structures are now so burdensome, the nation can no longer afford these services.Healthcare has risen from 5% of GDP to 19%. The more burdensome and intractable the systemic costs, the greater the gains to be reaped from disrupting the status quo.

The Military-Industrial/National Defense Complex is another sector ripe for massive disruption and reduction of costs. Compare the troubled $1 trillion F-35 aircraft program (which is increasingly looking like the most expensive weapons system failure in human history) with increasingly effective and cheaper drones: A Drone Has Never Linked Up With a Refueling Tanker Until Now.

In other words, protecting unaffordable, ineffective fiefdoms and cartels will be a losing strategy in the next 20 years. These costs will come down, one way or another, either by the erosion and collapse of the funding sources or by tech-enabled socio-economic disruptions.

That leaves everyone depending on any existing sector/industry that hasn't yet been turned upside down with a choice: either join the disruptors or prepare to be disrupted.

A little more along these lines ..

The Old Models of Work Are Broken

Any employer who pays humans to do work that can be automated or performed elsewhere for a fraction of the cost will soon go broke as competitors eat his/her lunch. Employers that want to survive recessions and competition can only pay for the value their employees create in the marketplace. Consumers don't pay for blue sky, and so neither can employers.

The government is currently immune to such pressures, but since the state is itself dependent on taxes skimmed from profits and wages, the erosion of the old model means the state's revenues are doomed to shrink right along with profits and wages.

No sector will be immune to the changing nature of work and value creation.


Here is an example of the old guard trying to hold on to the old ways, and keep their control.

Great! Now you never really “own” your car either

GM thinks that because they hold a copyright to some software, that somehow gives them ownership over what you do with the copy you legally purchased with the car itself. Once that purchase is concluded, the vehicle owners should be seen to have given up any proprietary interest in the single vehicle you bought. But thanks to copyright and Section 1201, that’s an issue that faces “uncertainty.” And that’s a problem.
From the comments section;  “The logical next step is to disallow the use of the car without a software-license from the manufacturer, rendering most cars unsellable on the second hand market without paying large sums to the car-maker.  Further steps: yearly license payments to operate your vehicle & payments per designated allowed driver.”
Here’s the GM statement:
Proponents incorrectly conflate ownership of a vehicle with ownership of the underlying computer software in a vehicle…. Although we currently consider ownership of vehicle software instead of wireless handset software, the law’s ambiguity similarly renders it impossible for Proponents to establish that vehicle owners own the software in their vehicles (or even own a copy of the software rather than have a license), particularly where the law has not changed.

First, EMP can knock out your car. Now, this. When were computers first put in cars?  Mid 1970’s?  I wouldn’t be surprised if one day there isn’t a huge demand for pre-1975 vehicles.  Really, who needs this shit?


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