2016: crystal ball gazing, how did I do?

Here are the predictions made at the top of the year

I expect Uber will continue to funnel money into China and still get sand in its face. Quite what this means for Lyft I am not so sure.

Uber raised more money, realised that things still weren’t improving and then got a face saving exit from the Chinese market. I’ll call that a win.

Twitter gets a change of management, but that doesn’t do any good… All of this would be bad news for potential advertisers and their intermediaries in the advertising and PR world.

God, where do we start with Twitter. It has had extensive management churn and a big staff lay-off. I don’t think that my own view about a change of management is correct though. I envisaged this as a strategic proactive more by the board rather than the current rotating door. I have been impressed by how well Twitter advertising has held up. Twitter might look like the Yahoo! of social media, but it still holds a lot of weight with the mainstream media which still counts for something.

Fintech bubble that will take good ideas and bad ones down together. Banks are currently considered to be ripe for disruption. One of the key problems with this is that technologists think it will be easy to sweep aside regulations that banks operate under.

This one is still percolating out. Banks are looking particularly at Blockchain as the basis of a better transaction ledger/database. Informally, I have heard that VC funding has largely dried up on fintech start-ups; but the other shoe has yet to drop.  Zopa applying for a bank licence and becoming a bank felt like a watershed moment.

The internet in the EU will become increasingly regulated. At the moment the European Union is succumbing to The Fear. 

The fear has grown beyond terrorism to being overrun by immigrants (some of whom will be terrorists). The UK is well on its way to putting into law some of the most Draconian web laws in the western world from porn filtering to sharing citizen web history access with a wide range of government agencies.

Overall this has made less progress than I expected because Brexit became the existential challenge that the EU members will seek to vanquish.

We will have reached peak smartphone and tablet. China has now reached replacement rate for devices, there is a corresponding lack of paradigm shifts in the pipelines for smartphone design and software. Tablets have shown themselves to be nice devices for data consumption but not requiring regular upgrades like the smartphone or replacement for the PC.

We’ve certainly reached peak tablet. Smartphones are taking a longer while to shake out. What we are seeing is declining margins in smartphones. Apple increased its industry share of profits to 90% despite:

  • Making a weak update to the iPhone 6S
  • Having a declining market share
  • Having a higher cost in terms of bill of materials

There were some one-off factors such as the Samsung Note 7 recall and the collapse of Hanjin Shipping which curtailed the supply of some handsets.

VR in 2016 will be all about finding the right content. VR won’t work in gaming unless it provides e-gaming athletes with some sort of competitive advantage, if it does then gaming will blow things up massively. Gaming will not be the only content vehicle for VR, it needs an Avatar-like moment to drive adoption into the early mainstream.

There were two things that surprised me about VR in 2016.

  • It look Sony so long to get VR on to the PlayStation, it will be a while for us to see the impact of gaming on the use of VR. It certainly provides immersive experiences, but does it provide e-athletes with competitive advantage?
  • China blew the amount of VR headsets available out of the water, but there has been a corresponding dearth of content. The stuff on YouTube is nice demo-ware, but where is the ‘Breaking Bad’ of VR

One thing that people aren’t talking about is the role of VR googles as a replacement for a large TV set. I have heard that some of the most used apps for VR is Netflix.

Older predictions
2016: just where is it all going? | renaissance chambara
2015: crystal ball gazing, how did I do? | renaissance chambara
2015: just where is it all going? | renaissance chambara
2014: crystal ball gazing, how did I do?
2014: just where is it all going? | renaissance chambara 
Crystal ball-gazing: 2013 how did I do?
2013: just where is it all going?
Crystal ball-gazing: 2012 how did I do?
2012: just where is digital going?
Crystal ball-gazing: 2011 how did I do?
2010: How did I do?
2010: just where is digital going?

Links of the day | 在网上找到

Hanjin Shipping collapse may be the beginning of the end for profitable global trade | South China Morning Post – As capacity growth has continued at around 6 per cent a year, with the global container fleet four times larger today than it was in 2000, so it is estimated that we today have a 30 per cent surplus capacity on the world’s main shipping routes. The combination of extra capacity and stagnant cargo growth has led to a ruthless price war that has meant wonderfully cheap freight rates for exporters, but has stripped the shipping lines of all profit.

The GeoCities Cage at Exodus Communications – amazing pictures – the cloud today wouldn’t look that different

疯狂希莉娅-电影-腾讯视频 (Mad Shelia) – a Chinese homage to Mad Max Thunder Road. Awkward product placements for apps and the fact that Thunder Road wasn’t allowed in China make this low budget work more divisive. Admittedly critics ignore the efforts by the likes of The Asylum in the US who are famous for their mock buster films

Infineon places its bets on compound semiconductors, lidar, radar | Electronics EETimes – interesting that LIDAR is right up there

Ctrip to buy UK’s Skyscanner for US$1.74b | Shanghai Daily – big move for Ctrip

WSJ City – UK Faces Lost Decade of Real Wage Growth – “One cannot stress enough how dreadful that is. We have certainly not seen a period remotely like it in the last 70 years.”

Autumn Statement shows cost of casual work ‘gig economy’ – BBC News – The UK’s “gig economy”, powered by self-employment and casual work, is starting to hit government revenues. Wednesday’s Autumn Statement for the first time showed how it is cutting into the government tax take. The Office for Budget Responsibility (OBR) estimates that in 2020/21 it will cost the Treasury £3.5bn. Wild West Workplace – self employment in Britain’s gig economy by Frank Field and Andrew Forsey – (PDF) the case study on couriers is particularly insightful and gives you an idea of how screwed it all is

China first to record 1m patent filings in a year | FT – interesting debate over what this means. Is it really innovation or driven by state targets. In some areas such as telecommunications there is a definite patent land grab and research being done for competitive advantage

Mainland money distorting Hong Kong land prices, tycoon warns | FT.com – I would have said that has been the case since the handover, its also distorting land prices and property prices

DPC steps up Yahoo! hack investigation | RTE – bad news for Yahoo! from an EU perspective

China’s airports to ‘scrap boarding pass on domestic flights as early as next year’ | South China Morning Post – interesting, I wonder how this will affect foreigners on domestic flights?

Strategy Analytics: Apple Captures Record 91 Percent Share of Global Smartphone Profits in Q3 2016 – which gives you an idea of how thin the margins are. BBK – owners of Vivo and OPPO are killing Huawei by comparison. This implies that Huawei’s premium range isn’t doing as well as its budget Honor range when one takes into account the cost of preparing for production (tooling etc) as well as bill of materials

IBM new server produced by Wistron, adopted by Tencent | DigiTimes – interesting that it looks so different to servers from the likes of Facebook or Google and much more like an enterprise data centre

Apple Takes Record Profit Share with iPhone in Q3, Says Strategy Analytics – Tech Trader Daily – which shows how commoditised the smartphone market has become, especially when you think that Apple itself has declining margins on the iPhone 7

Telegram launches Telegraph, a long-form publishing platform | VentureBeat – new paste bin type blogging platform, though many have considered it as a challenge to Medium / new blogging platform

Apple dumps wireless router development, will exit the market – ExtremeTech – this is a shame as I have found Apple Routers exceptionally easy to set up and very reliable. Apple is being ruined by the tyranny of large numbers and design obsessions in many of the wrong places

Forbes: How Jared Kushner Won Trump The White House – it is interesting how the Democrats ‘unlearned’ lessons of the Obama campaign

Things to be thankful for this week

Things to be thankful for this week. I have been out of sorts since Thursday, but now on the mend.

INDUSTRIAL JP / Record Label of Factory – really interesting Japanese record label that takes the principles of music concrete and turns them in to great house and techno tracks. The videos that accompany the tracks are hypnotic.

Virtual reality lets Chinese customers shop Macy’s New York store on the world’s biggest shopping day – really interesting e-commerce offering. It is an illustration of how much China-international e-commerce is so important.

Links of the day | 在网上找到

How the Trump Campaign Built an Identity Database and Used Facebook Ads to Win the Election – Medium – “I always wonder why people in politics act like this stuff is so mystical,” Parscale says. “It’s the same shit we use in commercial, just has fancier names.”

IBM confirmed it is building more data centres in the UK – Business Insider – with Brexit will come a data transition period as UK data comes onshore and EU data leaves

Nude pics as IOU: a new, risky online loan among Chinese university students – People’s Daily Online – interesting dynamic in trading financial risk for social risk

The MacBook Pro is a lie – The Verge – I know of no app developers, globetrotting businesspeople, or digital artists that had “more thinness” anywhere near the top of their priority list of MacBook Pro improvements – Apple has basically served up customers a beautifully designed shit sandwich with sprinkles on top

Pre Black Friday email marketing

I started receiving ‘Black Friday’ emails since the beginning of November. I eventually gave in and opened Apple’s email which arrived on the Tuesday morning.

Here’s what it looked like on mobile (iPhone 7 Plus)
Black Friday mobile email
Here is what it looked like on desktop email
Black Friday Desktop Email
Here is what the landing page looked like
Black Friday landing page

The call to action was to come back on Friday for great deals. There was a missed opportunity there was no reminder mechanism, no suggestion to bookmark the page and no way to build a list of things to purchase on the Friday.

Judging by the artwork, Apple wants the big push to be around the Apple Watch 2. Given the overall performance of smart watches as a sector this might be a bit ambitious, or indicate a supply chain imbalance in other product lines like the iPhone 7 and the new MacBook Pro?

If it was about lower price points, I would have thought that there would be more of a push on stocking fillers like the Airport Extreme or Apple TV to build buzz and store traffic?

The language was quite interesting

Our one-day shopping event will be here before you know it. Come back this Friday to tick everyone off your list

‘Tick everyone off’ in British English also means – annoy everyone or make them upset. Perhaps the copywriting could do with some finessing, given how that this is likely to be viewed at a glance if Apple is lucky by many consumers.

Just one more thing: Apple’s unpleasant surprise of a MacBook Pro

My initial reaction to Apple’s MacBook Pro wasn’t overwhelmingly positive. Now that I’ve tried one very briefly, I was even more unimpressed than I was at the launch.

Thin

I didn’t feel that much of a weight different between my current machine and the new model MacBook Pro. Who gives a flying fuck about the laptop being even thinner than the current MacBook Pro? You have to wonder if Apple really believes customers are gagging for a thin incompatible clamshell of mediocrity? I’d be more interested in power density of the battery – more charge and better performance from the laptop. Some connectors that I actually use would be great as well.

Display

If you already have a retina display laptop this is exactly the same.  The touchpad display is interesting, but it seems to take no account of finger span in the way the controls work on a couple of the default apps that I tried from the perspective of a touch typer.  I suspect that the 11″ MacBook Air was killed because Apple is desperately hoping sales will go to the iPad Pro.

Tactile experience

Apple made a big deal of the keyboard, but the truth of it is that it was wasted. The real effort was not about user experience and more about making things thinner. It isn’t the improvement on the previous MacBook Pro keyboard experience despite the clever engineering involved.

Real world performance

I’m a bit spoiled from a tech point of view. I am working on an early 2015 model MacBook Pro (Retina) 3.1GHz Intel Core i7 with 16GB of RAM and 1TB of solid state storage. I have an attached SuperDrive by USB and two Apple Thunderbolt displays.  The graphics performance is adequate with an Intel Iris Graphics 6100.
about this mac
Having had a quick play with the new MacBook Pro there didn’t seem to be a real world performance difference. You probably would need a machine that is five years old or more to get a speed bump.

Links of the day | 在网上找到

Qualcomm Boss Brainstorms on 5G | EE Times – interesting interview particularly around range and low latency of 5G

With TPP Dead, China Officially Launches Its Own Pacific Free-Trade Deal | Zero Hedge – it will be interesting to see how the US reacts

A Brief History of GPS—from James Bond to Pokémon Go | Mother Jones – interesting article with some great links

Are The Saudis About To Reveal The Best Kept Secret In Oil? | Zero Hedge – the reserve number could affect the way the world views and prices oil when disclosed

Three Mobile cyber hack: six million customers’ private information at risk after employee login used to access database  – it begs the question what is safe?

Metrics FYI | Facebook Newsroom – Facebook is fixing bugs in measuring organic reach, more here

Here’s How Facebook Actually Won Trump the Presidency | WIRED – according to President-elect Donald Trump’s digital director Brad Parscale, the social media giant was massively influential—not because it was tipping the scales with fake news, but because it helped generate the bulk of the campaign’s $250 million in online fundraising.

What the Hell Just Happened? – Medium – “I think that social media has more power than the money they spent, and I think maybe to a certain extent, I proved that.”

Nordstrom Rack Pulls Hoodie with Images of Nanjing Massacre from Online Store – its like a bad Zoolander plot device made real

Secret Backdoor in Some U.S. Phones Sent Data to China, Analysts Say – NYTimes.com – Adups provides software to two of the largest cellphone manufacturers in the world, ZTE and Huawei 

The software was written at the request of an unidentified Chinese manufacturer that wanted the ability to store call logs, text messages and other data, according to the Adups document. Adups said the Chinese company used the data for customer support

EU ministers to discuss plan to charge Britons to visit Europe after Brexit | The Guardian – hahahahaha

Key takeaways from the American Academy of Pediatrics tablet and smartphone guidelines for children – iMedicalApps – little evidence of benefit, some evidence of harm – wow

MacBook Pro with Touch Bar review roundup – Business Insider – its a bit meh basically

Mark Zuckerberg – I want to share some thoughts on Facebook and the election – post is on Facebook

Working class truths, populism and dark futures

Following president Trump’s election and the British plebiscite on European Union membership there has been lots of hand wringing about workers who traditionally participated in legacy industries being outside society.
We won't pay for their crisis - Mancunian protest sticker
Here is what we have to deal with:

  • The ‘traditional’ jobs aren’t coming back
  • Middle-class roles are already being disrupted
  • There is a declining  return on investment in further education, yet lifelong learning is a compulsory requirement
  • Globalisation is working at an aggregate level, but isn’t working at a local level
  • Western society has fractured. It will become more fractious once the realisation takes hold that:
  1. It can’t be resolved by simple measures, populists might listen – but can’t solve anything. Jobs are governed by a multiple factors that affect both cost and demand considerations
  2. It can’t be solved in a relatively short time frame. You can’t build the necessary eco-system and supporting industries to bring the jobs back; even if the economics made sense
  3. Governments don’t have their hands on the levers of control, the best governments can do is actively manage decline. Technological disruption puts the levers of control with a smaller group of people
  4. There is a lack of willingness by those with the money and the power to solve it – primarily due to the pressures that drive their behaviour
  5. Existing social welfare safety nets aren’t sustainable

The realisation that populism doesn’t deliver is likely to cause a further visible outburst of anger. Which should be good news for the private security industry. This could result in civil or international conflict. It has already happened. Factors that contributed to the Arab spring and the Syrian civil war included a large under-employed population living in stagnant economic conditions with no hope in sight. This probably sounds familiar.

I am ruling out some sort of positive ‘black swan’ event which changes the game completely and provides meaningful work with great wages across societal boundaries. If I could reliably predict these, I would be writing this from my private Airbus A380.

Instead I can see four broad categories of outcomes, all of which are ugly:

  • Carry on – carrying on isn’t likely to be sustainable as societal pressures go to breaking point
  • Managed decline – from a rational point-of-view the most ‘possible’ solution. Unpalatable from a voter perspective. It begs the question at what point would the UK economy bottom out? Managed decline makes the most sense as an interim measure whilst a country works out what its new place in the world is and charts a path towards it based on careful strategic investments with limited capital
  • Massive investment – presents a number of challenges that make it nearly impossible for western countries. It would require a long term view – unlikely without consensus driven politics with a high level of comity, huge access to credit – again unlikely with highly indebted economy and a slowly declining credit rating like the UK. Would take too long to satisfy angry voters
  • Massive disruption – the dice is thrown in the air as society tears itself apart and the strong gain control – think China’s Cultural Revolution. Wages and worker rights may drop to make them more cost competitive for low skilled manufacturing allowing for an employed but disgruntled workforce. Power is unlikely to shift too much, the corresponding upheaval in population numbers may provide some supply side pressure on wages when its all over. In all likelihood, it would just reduce pressure for change, increased willingness to work together on a longer term solution, but not provide much medium term economic benefit

Disruption

Here is a chart of numerous successful business, some of them are over a century old. AT&T and Verizon can trace their history back to 1877 and the Bell Telephone Company set up by Alexander Graham Bell’s father-in-law. General Electric goes back to work by Thomas Edison in 1880. These companies took from 117 – 137 years to become $200 billion businesses. Facebook took ten years requiring only 3% of the people AT&T needed.

It would be reasonable to assume that the future is going to create less jobs with given investments rather than more.

Company #Employees Year its market capitalisation became US$200 billion
Facebook 9,199 2014
Microsoft 27,000 1998
Apple 46,600 2010
Alphabet (Google) 46,600 2012
Amazon 165,000 2015
Verizon 176,800 2014
General Electric 239,000 1997
AT&T 302,000 2007

So large private enterprises will:

  • Employ less people which means less ancillary demand for services in the locale. Less restaurants, shops, artisanal coffee shops, micro breweries, nail bars, car valets, hotels and hair salons
  • Employ even less unskilled people – what unskilled labour is required will be employed on a flexible basis. Their roles will be competing on ‘total price’ with a global workforce and robotics

This hypothesis is supported by data from the MIT Technology review which showed that modern US manufacturing managed to increase productivity by 250% whilst reducing staff numbers by over 40%.

Win-Win to Winner Takes All

Technological progress and globalisation has resulted in a decline in the middle class in western countries. Pew Research claims that the US middle class declined from 61 per cent of the population in 1970 to 50 per cent by 2015.

Corresponding average ‘real wages’ for US ‘good producing’ workers peaked by the mid-1970s and have been broadly stagnant since. A pattern mirrored in other developed economies. Hong Kong saw a similar peak from 1967 riots through to the early 1990s until factories moved across the border.

Manufacturing productivity had grown steadily over that time. You can argue over the data points but the overall trend seems to hold true.

Owners of capital have enjoyed increased returns versus the providers of labour. Knowledge work, a key part of middle class roles could be easier to export than production lines. A classic example is the bank back office roles that have been exported to India.

Supply chain

At the moment UK manufacturing jobs operate as part of a complex supply chain that primarily addresses the European Union as a market. The supply chain is built around a number of factors:

  • The value of the product
  • The weight of the product
  • The volume of the product
  • The cost of shipping versus the cost of production
  • How well the product travels
  • Distribution of product demand
  • Proximity to suppliers
  • Proximity to talent

This is why companies may package a product in one country and manufacturer in others. Washing powder is a classic example of this. Chocolate travels well, so Cadbury could move production lines of internationally popular products to Poland. There is a greater incentive to move low skilled work out of areas that aren’t geographically central to a given supply chain.  European freedom of movement may have kept jobs in the UK by allowing low and semi-skilled workers to move rather than the factories. This would be of little consolation to UK workers, but would benefit UK tax coffers.

This complex formula is the reason why jobs move in and out of the UK.

Cutting the UK out of this supply chain with a hard Brexit ensures that suppliers have to make complex choices. BMW will probably be wondering what UK presence it needs to maintain in order to keep the Mini brand values. It may decide its easier to evolve the quirky Britishness out of the brand over time and just keep it quirky. The Audi TT hasn’t been harmed by actually being assembled in Hungary.

The majority of components in the supply chain for the Mini production line is based in Germany.

A post-Brexit UK could be in the position of importing more rather than less products once companies take into account the bigger picture of the supply chains and the EU single market.

Role of eco-systems

Richard Florida is a Canadian professor who has spent much of his time looking at urban studies from the perspective of prosperity. He is known for is work around the creative class and urban regeneration (or gentrification). His work is controversial. One key concept he has of relevance to working-class communities is one of ‘clusters’ where eco-systems exist.  When you apply it to traditional working class industries one can see how the jobs aren’t just going to come back. The UK has a series of traditional clusters that are in overall decline, this is best illustrated by the state of chemical, oil refinery and coal sectors which underpin a wide range of manufacturing industries.

Where new clusters spring up (Silicon Roundabout and the FinTech businesses within the Square Mile) they create employment that much of the UK population is ill-equipped to fulfil.

Let’s look in greater depth at traditional manufacturing industries.

Factories build on suppliers, who build on raw materials processors, who build on utilities and extractive industries. Take for example industrial revolution era Stoke-on-Trent which was close to high quality clay pits and coal that could be cheaply shipped in from mines in Lancashire or South Yorkshire.

Unfortunately for Stoke-on-Trent; clay is readily available around the world, opening up the possibility of production in areas with cheap labour. Automation raised the quality of production and fashion can quickly dictate whether an ‘area’ brand is in demand.

If we look at the industrial landscape of the United Kingdom, the manufacturing industry has been hollowed away during the 1980s and 1990s. The UK lost 18% of its manufacturing capacity in the space of 18 months during the conservative government of Margaret Thatcher.

There has been a corresponding (likely terminal) decline in the necessary facilities to support an industrial economy. Now let’s look in-depth at three essential types of facilities that underpin manufacturing:

  • Oil refineries
  • Coal mines
  • Chemical plants

This base of the UK industrial eco-system is running on ‘life support’ in critical areas.

I was fortunate to have a great science teacher at school, he once said to me that you could measure the size and health of an industrial economy by the amount of sulphuric and hydrochloric acid it manufactured and consumed. In order to manufacture hydrochloric acid you need a chlorine gas plant – neither chemical is something you want to transport over long distances. The side effects of a leak would be catastrophic.

The UK currently has one plant to make chlorine gas that is government subsidised because there isn’t a sufficiently large industrial base to support continued profitable production. What industrial capacity is in the UK is perilously close to being snuffed out.

What is left of the UK chemical industry has consolidated in the North East of England Process Industry Cluster (NEEPIC). Some of the products created are intermediary chemicals for use elsewhere in the European Union. Brexit is likely to have a disruptive effect on some of these manufacturers. The cluster is a key reason why Nissan decided to build a manufacturing plant in Sunderland. NEEPIC is dependent on oil refining capacity for key chemical building blocks (feedstock).

Oil refineries are considered by the public as providers of petrol (gasoline), diesel and jet fuel. The reality is that they provide feedstock (chemical building blocks) for most things in everyday life:

  • Foods
  • Medicines (or we can go back to leeches and blood letting)
  • Paints (containers, large manufactured goods, civil engineering)
  • Plastics (the modern world as we know it) – structural plastics, coatings, fibres including clothing textiles

As I write this is, it is easier to look around my desk and count the products that don’t have an oil-derived input – one item, the desk itself which is unpainted. Though I would put good money on it that the trees it was made from were felled with petrol chain saw and transported on a diesel powered lorry to the saw mill.

Yet the UK has lost a huge amount of oil refining capacity. From 1974 – 2012 refining capacity almost halved from 148 million tonnes to 77 million tonnes (Energy Institute). This decline happened despite start of UK North sea oil production in 1975.

Peak production on North Sea oil occurring in 1985 and 1999 (two peaks due to technological innovation). There were 22 active oil refineries in 1974, at the time of writing there are now seven.

Part of this was driven by changing energy consumption such as the decline of home heating oil and more fuel efficient cars. But a good deal would be due to reduced ability to compete against foreign petro-chemical feedstocks and reduced industrial capacity.

Oil refining capacity has moved to closer to where the industry is.

Belgium and the Netherlands have oil refining capacity beyond their internal needs because of their ease of access to continental European markets. Germany as Europe’s industrial powerhouse has the largest refining capacity in the European Union – which matches its industrial economy.

Much of the capacity to provide chemical feedstocks for industrial use has moved to the Far East; notably Singapore, Japan, Korea, Jamnagar in India and China. Overall industrial production has moved to East and Southeast Asia.

Coal production in the UK is roughly 10 percent of what it was in 1980. There are no deep coal mines active in the UK, only a handful of open cast mines. Coal is not only useful as a fuel but also a alternative supplier of feedstock for a diverse range of products including fertilisers, plastics and medicines. Even if coal comes back to prominence as oil reserves run out it would take a lot of effort to get UK production going again – perhaps too much effort.

Managed decline

The purpose of managed decline would be to concentrate efforts where they can make the most impact. London would draw in more people from the hinterlands. Cities like Liverpool would continue to decline in population. Low quality housing (think trailer parks or shanty towns) would cater for the internally displaced workers and there would be a likely increase in casual or gig economy roles.

So what would managed decline look like? We have a clue from government discussions after the 1981 Toxteth riots. Lord Geoffrey Howe wrote a letter which was considered too controversial at the time

“I fear that Merseyside is going to be much the hardest nut to crack,”

“We do not want to find ourselves concentrating all the limited cash that may have to be made available into Liverpool and having nothing left for possibly more promising areas such as the West Midlands or, even, the North East.

“It would be even more regrettable if some of the brighter ideas for renewing economic activity were to be sown only on relatively stony ground on the banks of the Mersey.”

“I cannot help feeling that the option of managed decline is one which we should not forget altogether. We must not expend all our limited resources in trying to make water flow uphill.”

Howe realised that even discussing the concept at the time would be explosive.

In practical terms, it would mean:

  • Re-centralising government departments
  • Not spending on infrastructure beyond critical maintenance
  • Rationalising government support infrastructure: police, hospitals, social services
  • Re-zoning areas from a planning perspective to encourage development only in future clusters
  • Allowing local government to go into bankruptcy protection and under go US-style emergency management
  • Once population decline hits a critical mass, turning off the last services, rather like the city of Detroit has done
  • Focus infrastructure investment on ‘clusters’
  • Connecting benefits to re-location

This process would then give time for western countries; in particular the UK, to re-invent themselves and think about their economic purpose in the world beyond consumption.

The Chinese government have already started on this process whilst their economy is still in a high state of growth – looking to move up the manufacturing value chain, moving into the professional and financial services sectors that the west currently occupy. On the flip side they have not flinched from closing down excess capacity in the steel industry and low value industries. This is causing economic hardship amongst unskilled workers in Guongzhou and the steel towns of Hubei province.

Former clothing factories are being bulldozed to make way for corporate campuses. Small electronics factories in Shenzhen are making way for a financial services centre including a stock exchange.

If one thinks about the Chinese experience and their migration to higher value work, where would the UK go next?

More information
The Current Moment | Poverty, Inequality and Productivity
Manufacturing Jobs Aren’t Coming Back | MIT Technology Review
The American Middle Class Is Losing Ground | Pew Research Center
Toxteth riots: Howe proposed ‘managed decline’ for city | BBC
Detroit’s Least Bad Option | The New Republic

Five for Friday | 五日(星期五)

Things that made my day this week

My Voucher Codes hijack of the John Lewis Christmas advert. My Voucher Codes cost £400, John Lewis reputedly paid £7 million for theirs. Well done that planner

Polish beatbox champion Mic Bandit versus Irish traditional band Jiggy

Luc Besson takes on Valerian and Laureline in his film adaption Valerian – City of a Thousand Planets. I was completely oblivious to this whilst reading the first four volumes of the comic. It is a fantastic product of the late 1960s and pretty reasonably priced by graphic novel standards.

Neill Blomkamp did a couple of clips that reimagined the Trump presidential motorcade. Air Force 1 looks a bit like the spaceship in Silent Running and the presidential limousine feels like something out of The Hunger Games

Amazing footage of metallic crystal formation

This week I had Andy Caldwell’s remix of Marvin Gaye’s What’s Going On playing on repeat. I love the way the percussion is complex and layered yet the song feels stripped down.

Links of the day | 在网上找到

A ‘Highly Lethal’ War Of ‘Fleeting’ Advantages: Multi-Domain Battle « Breaking Defense – exceptionally grim reading

Sensor City strikes China Deal – not sure how UK will gain in longer term

UPS, SAP, Fast Radius pact for industrial 3D printing – Business Insider – blurring the line between logistics and manufacturing

Google rejects EU Android competition charges | RTE – but they are an effective monopoly rather like Windows complete with bundling issues

UK trade deficit widens unexpectedly as exports fall despite pound drop | The Guardian – “If we are lucky, the weak pound may boost exports, but I would highlight that export growth tends to be driven more by the strength of overseas demand, rather than the exchange rate.”

Silicon Valley Is Worried That Trump Is Going To Grab Them By The Data – BuzzFeed News – interesting comments by Pinboard founder

Shell #makethefuture – Best Day of My Life – interesting, odd music based campaign by Shell

Decoding the GDPR and its implications for UK children | LSE Media Policy Project – interesting analysis

LeEco’s CEO Jia Yueting Says Company Overstretched, Now Running Out of Cash – Slashdot – possible acquisition target for Huawei?

Five for Friday | 五日(星期五)

Things that made my day this week

The internet was given a brief respite from Pen Pineapple Apple Pen with the election of Donald Trump as US president elect. So you might have missed out on a Death Note themed rendition of PPAP

Original

Death Note’s Ryuk

This week I spent a good deal of time listing to

DJ Dimitri from Paris

Reckless Driving from J Dilla. It is quite unusual to listen to hip-hop with rich major chords
#DYKHEADS – amazing examples of poor content development

Demis Hassabis presented about AI at The RSA, quite interesting state of the technology at the moment

Links of the day | 在网上找到

The legal questions at the heart of the High Court Article 50 ruling – BBC News – interesting how the points have been highlighted in terms of law. The precedent post-Brexit would be more interesting

Founder Dilution | A VC – great breakdown

Apple has killed off everything good about the Macbook Pro – TechEye – size zero design obsession bullshit

YouGov | Should Labour be a workers’ party, or a party of the liberal left? – interesting read, one can see that the ‘Labour voters’ are a more natural constituency for UKIP and the Conservatives. Classically the voters which kept Thatcher in power

The influencer economy is real, but brands and agencies are at risk of destroying it | Campaign – great op-ed by Rob Hinchcliffe

Remembering the Clancy Brothers on the anniversary of Tom’s death (VIDEOS) – interesting to hear how the beat poets and and counterculture influenced something I thought was auld Irish

China’s new cybersecurity law is bad news for business | TechCrunch – its bad for non-Chinese businesses

Shop Til You Drop? Shanghai Mall Opens “Husband Nursery” | What’s On Weibo – interesting trial by Vanke, I wonder if they will roll it out to other properties

China is making a product that Apple should have done

Trawling eBay gives access to a cottage industry of predominantly China-based suppliers. They take iPod Classics and remanufacture them. They get new cases and new batteries.

Real trick is in the new component put in the device. Out goes the Toshiba micro-hard drive of 120GB or 160GB and in goes a 256GB SSD. Apple had abandoned production of the iPod Classic because it couldn’t get the right parts any more. Technology had moved on and flash memory had replaced micro hard drive’s as storage technology of choice for portable consumer devices.
iPod ClassicSwapping out the hard drive for an SSD provides an iPod with a number of advantages:

  • Its a third lighter than Apple’s version of the iPod Classic. This changes dynamics in usage. It no longer has the same heft, you feel less conscious of it in a pocket or jacket
  • The battery lasts longer. I now get about 30 hours of listening from the iPod. By comparison I get 18 hours out of my smartphone. If I used the smartphone as a music player as well, that battery time would drop further. If I used a streaming service, that would sound worse, hammer the battery life and mobile phone bill even further
  • It holds more music. At 256GB up from 160GB in the last model of iPod Classic it makes the difference between being able to hold all of my music library with me or not. You don’t have Spotify when you have 15,000+ tracks to choose from
  • The same great iPod experience. iTunes still syncs with the device. It has a good quality DAC (digital-to-analogue convertor) chip. With the right headphones and a sufficiently high sample rate it is indistinguishable from CDs. Under normal circumstances it sounds better your typical smartphone – which is trying to do lots of job well
  • It is quieter than the original iPod Classic. There is no longer the noise of a hard drive spinning up and reading the music data from the disk
  • Vigorous movement is not a problem. Apple had done a good job with the original iPod Classic songs were cached in RAM to iron out temporary stoppages due to movement affecting the hard disk. An SSD had no moving parts so it isn’t an issue any more

What becomes apparent is that Apple wouldn’t have had to make that much effort to make the product itself, but for no known reason it didn’t want to.

I suspect that part of this is down to:

  • The law of big numbers. The iPod Classic revamped in this way would be a decent business for most companies, but just isn’t as big as Apple is used to
  • A modified iPod probably too simple a design solution. Apple likes to take a big step forward (even when it doesn’t) – there are no plaudits or design awards in an iPod Classic with a solid state drive

The reimagined iPod is a development in sharp contrast to Apple’s new product developments:

  • Loved products bought by key Apple advocates have not been updated or ignored: the Mac Pro and the Apple Display (which Apple has abandoned)
  • Moving out of entry level products. With the MacBook Pro and MacBook line-ups, the entry device is now a secondhand laptop rather than the 11″ MacBook Air or the non-Retina MacBook Pro
  • Big bets that aren’t resonating with the marketplace: the Apple Watch has been a best selling smart watch; but is in a category which lacks a compelling reason to purchase. The iPad is a passive content consumption device for most consumers. It has a replacement cycle that would be more familiar to television manufacturers than a computer company

 

Links of the day | 在网上找到

Why do diplomats use this alien WhatsApp emoji for Vladimir Putin? | Technology | The Guardian – personally I’d still want to be using Signal rather than giving Facebook indirect oversight of messaging

VCR era ends due to lack of chips – and demand | Electronics EETimes – interesting analysis of the engineering that went into analogue video recorders

How did China’s Xi Jinping secure ‘core’ status in just four years? | South China Morning Post

The Story of the Self Destruction of Deutsche Bank – SPIEGEL ONLINE – fascinating read

Microsoft Is Looking Like the New Apple | MIT Technology Review – this isn’t the headline Apple want. Its kind of like the immediate aftermath of Windows 95. I think Apple’s interface design call is right but its marketing, product design and pricing is fucked. If they had put 32GB RAM in the machine, hadn’t upped the pricing and messed with the ports as badly this wouldn’t be a problem. It’s execution which is failing them

Is the Gig Economy Cannibalizing or Creating Jobs? Here’s Some Early Evidence. – The Experts – WSJ – that the spreading gig economy (at least in the case of ride-sharing) is, in fact, substituting for some payroll employment, or at least depressing its growth.

China Prepares To Impose Curbs, “Capital Controls” On Bitcoin – inevitable to control capital outflows. Given China’s market maker status it could also weaponise bitcoin