The Value of Everything: making and taking in the global economy is written by Italian-American academic Mariana Mazzucato.
Background
Mazzucato’s work focuses on the intersection of innovation, economics and the role of government. Currently she is Professor in the Economics of Innovation and Public Value at University College London (UCL).
For an economics book The Value of Everything is surprisingly accessible to read. I managed to get through it’s 180 pages in just over a day.
Starting with a quick tour of economic history over five centuries, Mazzucato dissects what value actually means, its connection to statehood and how that meaning has evolved over time.
Premise
The central premise of Mazzucato’s argument is that there are problems the way market economies currently work. Those problems come from the imbalance between value creation and value extraction. The book argues that it is far too easy for those operating in the market economy to get rich by extracting value from those who actually create it, rather than by adding it themselves.
The book diagnoses the reasons for this challenge, notably how value is defined by economists, business people, governments, investors and politicians. Along the way, it touches on what Will Hutton’s The State We’re In termed ‘short-termism’. Mazzucato’s argument isn’t a new one and covers areas that have been talked about in the UK economy since the 1960s by the likes of economist Nicholas Kaldor. If you’ve watched the work of BBC documentary film maker, Adam Curtis the subject matter will feel very familiar.
Mazzucato also addresses the value imbalances in technology platforms echoing the work of Columbia law professor Tim Wu’s work from The Master Switch in 2010 to The Age of Extraction published last year.
In at the top
What makes Mazzucato different to the likes of Gary Stevenson is that the current government is at least paying lip service to her ideas, notably the idea of a mission led government. Whether or not the government can turn Mazzucato’s ideas in The Value of Everything into actionable policy and deliver on it is a discussion way beyond this book review.
Welcome to my February 2025 newsletter, I hope that your year of the snake has gotten off to a great start. This newsletter marks my 19th issue – which feels a really short time and strangely long as well, thank you for those of you who have been on the journey so far as subscribers to this humble publication. Prior to writing this newsletter, I found that the number 19 has some interesting connections.
In mandarin Chinese, 19 sounds similar to ‘forever’ and is considered to be lucky by some people, but the belief isn’t as common as 8, 88 or 888.
Anyone who listened to pop radio in the mid-1980s to mid-1990s would be familiar with Paul Hardcastle’s documentary sampling ’19’. The song mixed narration by Clark Kent and sampled news archive footage of the Vietnam war including news reports by read by Walter Cronkite. 19 came from what was cited as the average age of the soldier serving in Vietnam, however this is disputed by Vietnam veteran organisation who claim that the correct number was 22. The veteran’s group did a lot of research to provide accurate information about the conflict, overturning common mistakes repeated as truth in the media. It’s a handy reminder that fallacies and trust in media began way before the commercial internet.
New reader?
If this is the first newsletter, welcome! You can find my regular writings here and more about me here.
Things I’ve written.
Zing + more things – HSBC’s Zing payments system was shut down and was emblematic of a wider challenge in legacy financial institutions trying to compete against ‘fintech startups. I covered several other things as well including new sensor technology
The 1000 Yen ramen wall is closing down family restaurants across Japan. A confluence of no consumer tolerance for price elasticity due to inflation driven ingredients costs is driving them to the wall. Innovation and product differentiation have not made a difference.
Luxury wellness – why luxury is looking at wellness, what are the thematic opportunities and what would be the competitors for the main luxury marketing conglomerates be successful.
Technical capability notice – having read thoroughly about the allegations that Apple had been served with an order by the British government to provide access to its customer iCloud drive data globally – I still don’t know what to think, but didn’t manage to assuage any of my concerns.
Books that I have read.
World Without End: The million-copy selling graphic novel about climate change by Jean-Marc Jancovici and Christophe Blain. In Japan, graphic novels regularly non-fiction topics like text books or biographies. A French climate scientist and illustrator collaborated to take a similar approach for climate change and the energy crisis. Their work cuts through false pre-conceptions and trite solutions with science.
Laws of UX by Jon Yablonski. Yablonski breaks down a number of heuristics or razors based on psychological research and how it applies to user experience. These included: Jakob’s Law, Fitt’s Law, Hick’s Law, Miller’s Law, Peak-End Rule and Tesler’s Law (on complexity). While the book focuses on UX, I thought of ways that the thinking could be applied to various aspects of advertising strategy.
I re-read Hooked: How to Build Habit-Forming Products by Nir Eyal. Eyal’s model did a good job at synthesising B.J. Fogg’s work on persuasive computing, simplifying it into a model that the most casual reader can take and run with it.
Kapferer on Luxury by Jean-Noël Kapferer covers the modern rise of luxury brands as we now know them. Like Dana Thomas’ Deluxe – how luxury lost its lustre Kapferer addresses the mistake of globalised manufacturing and massification of luxury. However Kapferer points out the ‘secret sauce’ that makes luxury products luxurious: the hybridisation of luxury with art and the concept of ‘incomparability’. The absence of both factors explain why British heritage brands from Burberry to Mulberry have failed in their current incarnations as luxury brands.
Black Magic by Masamune Shirow is a manga work from 1983. Masamune is now best known for the creation of Ghost In The Shell which has been turned into a number of anime films, TV series and even a whitewashed Hollywood remake. Despite the title, Black Magic has more in common with space operas like Valerian & Laureline by Pierre Christin and Jean-Claude Mézières than the occult. In the book Masamune explores some of the ideas which he then more fully developed in Ghost In The Shell including autonomous weapons, robots and machine intelligence.
Doll by Ed McBain. Doll was a police procedural novel written in 1965 that focused on the model agency industry at the time. The novel is unusual in that it features various artistic flourishes including a model portfolio and hand written letters with different styles of penmanship. The author under the McBain pen name managed to produce over 50 novels. They all have taunt dialogue that’s ready for TV and some of them were adapted for broadcast, notably as an episode of Columbo. You can see the influence of McBain’s work in the likes of Dick Wolf’s productions like the Law & Order, FBI and On Call TV series franchises.
Things I have been inspired by.
Can money make you happy?
Past research indicated that happiness from wealth plateaued out with a middle class salary. The latest research via the Wharton School at the University of Pennsylvania indicates that might not be the case instead, earning more makes you happier and there might not be a point at which one has enough. The upper limit on the research seems to have been restricted by finding sufficiently rich research respondents rather than natural inclination. As a consumer insight that has profound implications in marketing across a range of sectors from gaming to pensions and savings products.
AgeTech
I came across the concept of ‘agetech’ while looking for research launched in time for CES in Las Vegas (7 – 11, January 2025). In the US, the Consumer Technology Association (CTA) and American Association of Retired People (AARP) have put together a set of deep qualitative and quantitative research looking at the needs of the ‘aged consumer’ for ‘AgeTech’. AgeTech isn’t your Grandma iPad or your boomer CEO’s laptop. Instead it is products that sit at the intersection of health, accessibility and taking care of oneself in the home. The top five perceived age technologies are connected medical alert devices,digital blood pressure monitors, electric or powered wheelchairs/scooters, indoor security cameras, and electronic medication pill dispenser/reminders. Their report 2023 Tech and the 50-Plus, noted that technology spending among those 50-plus in America is forecast to be more than $120 billion by 2030. Admittedly, that ’50-plus’ label could encompass people at the height of their career and family households – but it’s a big number.
It even has a negative impact on the supply side of the housing market for younger generations:
The overwhelming majority (95%) of Americans aged 55 and older agree that aging in place – “the ability to live in one’s own home and community safely, independently, and comfortably, regardless of age, income, or ability level” – is an important goal for them. This is up from 93% in 2023.
The Mayfair Set v 2.0
During the summer of 1999, a set of documentaries by Adam Curtis covered the reinvention of business during the latter half of the 20th century was broadcast. I got to discover The Mayfair Set much later on. In the documentaries it covered how the social contract between corporates and their communities was broken down and buccaneering entrepreneurs disrupted societal and legal norms for profit. There is a sense of de ja vu from watching the series in Meta’s business pivots to the UK government’s approach to intellectual property rights for the benefit of generative AI model building.
It probably won’t end well, with the UK population being all the poorer for it.
The Californian Ideology
As to why The Mayfair Set 2.0 is happening, we can actually go back to a 1995 essay by two UK based media theorists who were at the University of Westminster at the time. It was originally published in Mute magazine.
This new faith has emerged from a bizarre fusion of the cultural bohemianism of San Francisco with the hi-tech industries of Silicon Valley. Promoted in magazines, books, TV programmes, websites, newsgroups and Net conferences, the Californian Ideology promiscuously combines the free-wheeling spirit of the hippies and the entrepreneurial zeal of the yuppies. This amalgamation of opposites has been achieved through a profound faith in the emancipatory potential of the new information technologies. In the digital utopia, everybody will be both hip and rich. Not surprisingly, this optimistic vision of the future has been enthusiastically embraced by computer nerds, slacker students, innovative capitalists, social activists, trendy academics, futurist bureaucrats and opportunistic politicians across the USA.
It reads like all these things at once:
A prescient foreshadowing from the past.
Any Stewart Brand op-ed piece from 1993 onwards.
The introduction from an as-yet ghost written book on behalf of Sam Altman, a la Bill Gates The Road Ahead.
A mid-1990s fever dream from the minds of speculative fiction authors like Neal Stephenson, William Gibson or Bruce Sterling.
What the essay makes clear is that Peter Thiel, Larry Ellison and Elon Musk are part of a decades long continuum of Californian Ideology, all be it greatly accelerated; rather than a new thing. One of the main differences is that the digital artisans no longer have a chance to get rich with their company through generous stock options.
Even Steve Jobs fitted in with the pattern. For a hippy he drove a 5 litre Mercedes sports car, parked in the handicapped spaces in the Apple car park and had a part in firing Apple’s first gay CEO: Michael Scott because of homophobia and Scott’s David Brent-like handling of Black Wednesday. It may be a coincidence that Tim Cook didn’t come out publicly as gay until over three years after Steve Jobs died.
… a European strategy for developing the new information technologies must openly acknowledge the inevitability of some form of mixed economy – the creative and antagonistic mix of state, corporate and DIY initiatives. The indeterminacy of the digital future is a result of the ubiquity of this mixed economy within the modern world. No one knows exactly what the relative strengths of each component will be, but collective action can ensure that no social group is deliberately excluded from cyberspace.
A European strategy for the information age must also celebrate the creative powers of the digital artisans. Because their labour cannot be deskilled or mechanised, members of the ‘virtual class’ exercise great control over their own work. Rather than succumbing to the fatalism of the Californian Ideology, we should embrace the Promethean possibilities of hypermedia. Within the limitations of the mixed economy, digital artisans are able to invent something completely new – something which has not beenpredicted in any sci-fi novel. These innovative forms of knowledge and communications will sample the achievements of others, including some aspects of the Californian Ideology. It is now impossible for any serious movement for social emancipation not to incorporate feminism, drug culture, gay liberation, ethnic identity and other issues pioneered by West Coast radicals. Similarly, any attempt to develop hypermedia within Europe will need some of the entrepreneurial zeal and can-do attitude championed by the Californian New Right. Yet, at the same time, the development of hypermedia means innovation, creativity and invention. There are no precedents for all aspects of the digital future. As pioneers of the new, the digital artisans need to reconnect themselves with the theory and practice ofproductive art. They are not just employees of others – or even would-be cybernetic entrepreneurs.
They are also artist-engineers – designers of the next stage of modernity.
Barbrook and Cameron rejected the idea of a straight replication of the Californian Ideology in a European context. Doing so, despite what is written in the media, is more like the rituals of a cargo cult. Instead they recommended fostering a new European culture to address the strengths, failings and contradictions implicit in the Californian Ideology.
Chart of the month: consumer price increases vs. wage increases
This one chart based on consumer price increases and wage increases from 2020 – 2024 tells you everything you need to know about UK consumer sentiment and the everyday struggle to make ends meet.
Things I have watched.
The Organization – Sydney Poitier’s last outing as Virgil Tibbs. The Organization as a title harks back to the 1950s, to back when the FBI were denying that the Mafia even existed. Organised crime in popular culture was thought to be a parallel corporation similar to corporate America, but crooked. It featured in the books of Richard Stark. This was despite law enforcement stumbling on the American mafia’s governing body in 1957. Part of this was down to the fact that the authorities believed that the American arm of the mafia were a bulwark against communism. Back to the film, it starts with an ingenious heist set piece and then develops through a series twists and turns through San Francisco. It was a surprisingly awarding film to watch.
Nakita – Nakita is an early Luc Besson movie made after Subway and The Big Blue. It’s an action film that prioritises style and attitude over fidelity to tactical considerations. The junkies at the start of the film feel like refugees from a Mad Max film who have happened to invade a large French town at night. It is now considered part of the ‘cinéma du look’ film movement of the 1980s through to the early 1990s which also features films like Diva and Subway. Jean Reno’s character of Victor the Cleaner foreshadows his later breakout role as Leon. It was a style of its time drawing on similar vibes of more artistic TV ads, music videos, Michael Mann’s Miami Vice TV series and films Thief and Manhunter.
Stephen Norrington’s original Blade film owes a lot to rave culture and cinéma du look as it does to the comic canon on which it’s based. It’s high energy and packed with personality rather like a darker version of the first Guardians of The Galaxy film. Blade as a character was influenced by blaxploitation characters like Shaft in a Marvel series about a team of vampire hunters. Watching the film almost three decades after it came out, it felt atemporal – from another dimension rather than from the past per se. Norrington’s career came off the rails after his adaption of The League of Extraordinary Gentlemen did badly at the box office and star Wesley Snipes went to jail for tax-related offences.
The Magnificent Seven– I watched the film a couple of times during my childhood. John Sturges had already directed a number of iconic films: Bad Day at Black Rock and Gunfight at The OK Corral. With The Magnificent Seven, he borrowed from The Seven Samurai. It was a ‘Zappata western’ covering the period of the Mexican revolution and was shot in Cuernavaca, Mexico. The film did two things to childhood me: made me curious about Japanese cinema and storytelling. There are some connections to subsequent Spaghetti Westerns:
Eli Wallach played a complex Mexican villain in bothThe Magnificent Seven and Leone’s The Good, The Bad & The Ugly.
The visual styling of the film is similar to spaghetti westerns, though the clothes were still too clean, Yul Brynner’s role as the tragic hero in black is a world-away from the traditional Hollywood coding of the good guys wearing white hats (or US cavalry uniforms).
The tight, sparse dialogue set the standard for the Dollars Trilogy and action films moving forward
Zappata westerns were the fuel for more pro-leftist films in the spaghetti western genre. While The Magnificent Seven still has a decidedly western gaze, it took on racism surprisingly on the nose for a Hollywood film of this era.
Watching it now as a more seasoned film watcher only sharpened my appreciation of The Magnificent Seven.
Breaking News by Johnnie To feels as much about now as it when the film was shot 20 years ago. First time I watched it was on the back of a head rest on a Cathay Pacific flight at the time. Back then I was tired and just let the film wash over me. This time I took a more deliberate approach to appreciating the film. In the film the Hong Kong Police try and control and master the Hong Kong public opinion as a robbery goes wrong. However the Hong Kong Police don’t have it all their own way as the criminals wage their own information campaign. This film also has the usual tropes you expect from Hong Kong genre of heroic bloodshed films with amazing plot twists and choreographed action scenes along with the spectacular locations within Hong Kong itself. Watching it this time, I got to appreciate the details such as the cowardly dead-beat Dad Yip played by veteran character actor Suet Lam.
Useful tools.
Current and future uncertainties.
This could be used as thought starters for thinking about business problems for horizon scanning and scenario planning. It’s ideal as fuel for you to then develop a client workshop from. But I wouldn’t use something this information dense in a client-facing document. You can download it as a high resolution PDF here.
Guide to iPhone security
Given the propensity of phone snatching to take over bank accounts and the need to secure work phones, the EFF guide to securing your iPhone has a useful set of reminders and how-to instructions for privacy and security settings here.
Novel recommendations
I got this from Neil Perkin, an LLM-driven fictional book recommendation engine. It has been trained on Goodreads (which reminds me I need to update my Goodreads profile). When I asked it for ‘modern spy novels with the class of John Le Carre’ it gave me Mick Herron’s Slow Horses, Chris Pavone’s The Expats and Chris Cumming’s The Trinity Six. All of which were solid recommendations.
Smartphone tripod
Whether it’s taking a picture of a workshop’s forest of post-it notes or an Instagrammable sunset a steady stand can be really useful. Peak Design (who were falsely accused of being a ‘snitch‘) have come up with a really elegant mobile tripod design that utilises the MagSafe section on the back of an iPhone.
Apple Notes alternative
I am a big fan of Apple Notes as an app. I draft in it, sync ideas and thoughts across devices using it. But for some people that might not work – different folks for different strokes. I was impressed bu the quality of Bear which is a multi-platform alternative to the default Notes app.
The sales pitch.
I am now taking bookings for strategic engagements; or discussions on permanent roles. Contact me here.
Welcome to my February 2024 newsletter which marks my 7th issue. I hope that your year of the dragon is off to a great start.
The number 7 is a bit of a mixed bag, depending on how you look at it. In the old testament, the 7th heaven is where God’s throne is, alongside the angels. It had been considered a place of happiness, hence Gwen Guthrie’s Seventh Heaven. In Mandarin, the number is considered generally a positive thing, the number is a homophone for ‘arise’ and ‘life essence’. But that’s only half the story.
Indications of 7’s unlucky nature include the seventh month in the lunar calendar being a ‘ghost month’. In Cantonese, it is a homophone for a vulgar way of saying penis. I hope your February wasn’t a dick of a month.
For film buffs it’s almost 28 1/2 years since the transgressive crime thriller Seven was released. It was a break out hit and became the seventh highest grossing film of 1995, behind Die Hard with a Vengeance, Toy Story and Apollo 13. It beat out other films like Braveheart in box office earnings, but Braveheart ran away with the Oscars.
Let’s hope that feng shui master Michael Chiang is correct in terms of the positive energies from the year of the dragon.
New reader?
If this is the first newsletter, welcome! You can find my regular writings here and more about me here.
Things I’ve written.
FOOH – and the ethical and marketing challenges it presents with a thought experiment harking back to the golden age of pornography.
Technonationalism – how current technological developments mirror the cold war and the 20th century Asian economic miracle.
Innovation signalling – how innovation is used by brands for show, rather than for genuine progress.
Pipes by Yahoo – a remarkable web service that also causes us to reflect on the post modern web of today.
Hong Kong measurements – how something as simple as measurement units are a melding of culture, history, modernity and politics in a time of change.
Y2K was always more than a fashion phase, but it seems to have faded from the zeitgeist which means the fashion takes have no context. Here’s a bit of context for you.
Books that I have read.
What the Taliban Told Me by Ian Fritz. Fritz writes really, really well, otherwise I probably wouldn’t have been able to complete his personal memoir about his upbringing, service in Afghanistan onboard an AC-130 gunship and depression. In some ways it reminded me of Jarhead – Anthony Swofford’s memoirs of his life up to the time of being in the US Marines during the first Gulf War. Swofford’s book came out a decade and a half after his service. Fritz’ book feels much more immediate and without the flashes of humour and beauty that was in Swofford’s book.
Leftover Women: The Resurgence of Gender Inequality in China by Leta Hong Fincher. This was originally written in 2016, but has been updated to incorporate changes over subsequent years. It shows how government policy, ethnographic-nationalism, law enforcement, the legal system, collective punishment and community pressure is applied on modern women. I still find the content covering domestic violence shocking. This isn’t the China of Mao where in theory women hold up half the sky, instead it seems to be on a trajectory that would eventually see it closer to Mao’s view of China’s population, or Ceaușescu’s Decree 770 and other associated pro-natalist laws. This is a world away from the equally oppressive one-child policy, which had been brought in to deal with population related problems from the Mao-era.
The Big Book of Cyberpunk edited by Jared Shurin. I am huge fan of cyberpunks better known authors: William Gibson, Neal Stephenson and Bruce Sterling. This collection of 100+ stories written by authors from 25 countries is a mixed bag, but that’s no bad thing.
Things I have been inspired by.
J Walter ThompsonWunderman Thompson VML Intelligence launched their annual Future 100 report. It’s a great read and its continuity over the years makes it stand apart from the plethora of trends reports that get published every year. Their trends which intersect luxury and health are particularly interesting:
Althluxe
Bioharmonizing spas
Longevity resorts
Idyllic idleness
Author Cory Doctorow’s essay for Locus magazine plays devil’s advocate in considering the future of the crypto-based ecosystem and artificial intelligence is well worth a read. Doctorow speculates on what kind of bubble artificial intelligence is likely to become and the effect that its deflation may have. He draws on the outcomes of tech bubbles in the past including the dot com bubble and the telecoms bubble that accompanied it.
Just Conecting published a report on what seems to work on LinkedIn. It’s an interesting snapshot of what works at the moment, I am sure things will change over time as the algorithm evolves. Much of the focus seems to be orientated towards personal branding over business brands.
Over at Japan House, I marvelled at the exhibition Ainu Stories: Contemporary Lives by the Sara River. The Ainu are native to Japan’s northern islands and have survived for millenia in the extreme cold. Historically they were discriminated against, but now there is an appreciation of their culture. The art pieces on display are unique in their design, but share the attention to detail one sees in other Japanese work.
The Science Museum has an amazing exhibition on: Zimingzhong 凝时聚珍: Clockwork Treasures from China’s Forbidden City. Prior to the opium wars, UK craftsmen created fantastic clockwork-powered creations that were given as gifts to the emperor of China. The exhibition finishes on June 2, 2024. I went during Chinese new year. I came away with a refreshed appreciation of modern watchmaking complications, in particular devices like ‘minute repeaters’.
NS Lyons magnus opus The China Convergence is read by Regina Doman. Lyons’ premise is that western systems have converged with China’s approach to governance due to the rise of the technocrat. In this respect his perspective is similar to that shared by documentary maker Adam Curtis. Like Curtis, Lyons’ The China Convergence asks uncomfortable questions of us. Are we basically a less extreme version of the same system to the presses of mass and scale?
While we’re talking China, I can recommend the China Update YouTube account that provides a concise summary of Chinese business news and economic analysis garnered from a wide range of Chinese and western business publications.
Finally, IPSOS ongoing collection of reports this time reflects on the power of nostalgia. This time focusing on youth culture from cottage-core, Barbie mania, vinyl to vintage technical clothing and streetwear and the underlying drivers behind it. Why Nostalgia Is So ‘Fetch’ Right Now by Samira Brophy is well worth a read.
2023 Global Trends Report by ACROSS Health is a great census of healthcare professional media preferences and insight into omnichannel communications trends for pharmaceutical marketing. It is good reading and indicates that pharma clients who have an excessive efficiency bias and want to go to digital-only customer journeys will be left behind by peers taking a mixed approach.
Things I have watched.
Agent Hamilton – Carl Gustaf Hamilton is a Swedish answer to James Bond or Jack Ryan. Hamilton was the main character in a series of books written by a former investigative journalist, Jan Guillou, who served time in Sweden for exposing illegal intelligence operations. Guillou wrote the first Hamilton book in 1986 and the last one in 2012.
Blake and Mortimer – if you’re a fan of TinTin, you’ll like Blake and Mortimer as both come from the French -Belgian comic tradition. This cartoon series is based on the adventures of an eminent Scottish scientist and a British military intelligence officer in mid-century Europe. It’s nice light entertainment and I can recommend the graphic novels as well of which there are now 30+ stories including the Before Blake and Mortimer off-shoots. The authors have also wrote other excellent series like XIII.
Useful tools.
Audio Hijack 4.3
Rogue Amoeba’s Audio Hijack has been a mainstay on my Mac for far more years than I care to mention. It was great for everything from recording conference talks to putting together quick and dirty talk tracks that concepting films can be cut too. Version 4.3 features OpenAI’s Whisper transcription software that can cater to transcribing dozens of languages. I have found it better than tools like Otter.ai for me.
Krisp
Krisp.ai is a freemium service providing intelligent noise cancellation, call transcripts and meeting notes all in one. It works with Teams, Google Meetup, Slack and Zoom.
Obsidian
Just like Evernote back in the day, Obsidian has become a bit of a cult app for those that find it really useful. At its heart, it is a note taking and writing application. It will sync between desktop and mobile devices, but that costs $8/month – which is expensive. I haven’t been using it beyond a quick trial, as I have a well-defined set of tools that I use and Obsidian didn’t really slot in well. But I can appreciate the value of it to others. One thing I would be leery of, if you are moving to Obsidian is the cottage industry in snake oils salespeople hawking the ‘ultimate’ online course for Obsidian. Instead check out Obsidian’s own community pages of courses.
Todoist
Todoist is a shareable to do list that places it somewhere between quick and dirty project management and personal productivity. I am giving it a try following a recommendation from a friend. It’s not about whether products like this are good or not, but usually if it fits into your style of working, so your mileage may vary.
Early last year, fashion started to pillage the late 1990s and early 2000s for fashion inspiration, which became a Y2K trend on social platforms and in the fashion media. But this divorced Y2K from its original meaning. Y2K was technologist short hand for a calendar problem in a lot of legacy systems that were designed around a two digit date for years.
The rise of micro-processors had meant that the world had more computers, but also more computer control of processes from manufacturing to building air conditioning systems.
The HBO documentary Time Bomb Y2K leaned into the American experience of Y2K in an Adam Curtis type archival view, but without his narrative.
Millennium layers
There was so much to unspin from the documentary, beyond the Y2K bug, including the largely alarmist commentary. The run-up to the millennium had so many layers that had nothing to do with Y2K, but were still deeply entwined with anxiety around what might happen with Y2K.
This included:
Internet adoption and more importantly the idea of internet connectedness on culture through the lens of cyberpunk – which in turn influenced the spangliness of fashion around this time and the preference for Oakley mirror shades that looked as if they were part of the wearer. The internet was as much a cultural construct and social object as it was a communications technology. It memed AND then got people online.
Telecommunications deregulation. In the United States the Telecommunications Act of 1996, saw a levelling playing field be set out and allow for new entrants across telecoms networks to television. They also defined ‘information services’ which internet platforms and apps fitted into giving them many freedoms and relatively few responsibilities. You had similar efforts at telecoms deregulation across what was then the EEC. This saw a rise in alternative carriers who then drove telecoms and data commuunications equipment sales, together with a flurry of fibre-optic cables being laid. There was a corresponding construction of data centres and ‘internet hotels‘ to provide data services. With these services came an expectation that the future was being made ‘real’. Which in turn fed into the internet itself as cultural phenomenon. The provision of new data centres, opportunities for computer-to-computer electronic data interchange (EDI) and services that can be delivered using a browser as interface also drove a massive change in business computing.
An echo boom of the hippy back to the land movement, many of the people involved in that movement were early netizens. Hippy favourites The Grateful Dead had been online since at least 1996 and were pioneers in the field of e-commerce. The Whole Earth ‘Lectronic Link (or The WeLL) had founders from hippy bible The Whole Earth Catalog. There was also a strong connection through Stewart Brand to Wired magazine. Long time ‘Dead lyricist Jon Perry Barlow created a Declaration of the Independence of Cyberspace – a libertarian totem for netizens up to the rise of social media platforms like Facebook.
Millennial religious fervour. The Heaven’s Gate cult committed ritual suicide in 1997, and even posted about it on their website. The disastrous FBI showdown with the Branch Davidian cult in Waco, Texas had happened four years earlier and even today is a point of discussion amongst right-leaning Americans.
The confluence of noise around Y2K drove some anxiety and a lot of media chatter.
Advertisers did their bit to fuel insecurities as well.
However by October 1999, American consumers who responded to a poll by the Gallup Organisation were pretty confident that glitches would be unlikely
55% considered it unlikely ATMs would fail.
59% believed direct deposit processing wouldn’t be a problem.
60% said they felt that temporary loss of access to cash was unlikely.
60% believed credit-card systems were unlikely to fail.
66% felt that problems with check processing were unlikely.
70% had received Y2K-readiness information from their banks.
90% were confident their bank was ready for Y2K.
39% said they would definitely or probably keep extra cash on hand.
Y2K: More Signs of the Time | Computerworld (January 10, 2000)
Experts had felt that the Y2K challenge had largely been beat, but some prudent advice was given. I worked for a number of technology clients at the time including telecoms provider Ericsson and enterprise software company SSA Global Technologies. I had to keep my cellphone with me in case anything went wrong and we would have to go into crisis mode for our clients. Needless to say, I wasn’t disturbed during my night out at Cream by THAT call.
Technology experts like Robert X. Cringely were rolled out to advise consumers on prudent precautions. Have a bit of cash in your wallet in the unlikely event that card merchant services don’t work at your local shop. Have some provisions in that dont need refrigeration in case there is a power cut. And a battery or solar powered radio just in case.
All of these are still eminently sensible precautions for modern-day living.
Why were we ok?
The warning
There were several people who voiced warnings during the 1990s. Some of the most prominent were Ed Yourdon and Peter de Jager.
Risk management
During the 1990s company auditors were informing boards that they had to address Y2K. Failure to follow this would affect their ability to trade. Their public accounts wouldn’t be signed off and there would be implications for the validity the insurance policies need to run a business.
Approaches
IT professionals took Y2K very seriously, which meant that there was little to no impact. Some academics such as UCL’s Anthony Finkelstein posited that the problem was taken too seriously, though it is easier to say that in retrospect. There were a number of approaches taken to combat the risk of failure due to Y2K. In order of least to most ambitious they were:
Systems testing
Rip and replace
Recode
Systems testing
The Russian military had tested their systems for vulnerability to the millennium bug and announced this in the last quarter of 1999. Meanwhile businesses were often passing the testing out to contractors like Accenture with teams based in India, the former Soviet Union or the Philippines. There was a thriving market for auditing software to check if applications used two-digit dates or not. One of these was Peregrine Systems ServiceCenter 2000 Y2K Crisis Management software.
Testing highlighted problems at Oak Ridge Laboratories who process American nuclear weapons, the alarm systems at Japanese nuclear power stations and some kidney dialysis machines.
Problems would then be addressed by ripping and replacing the systems or recoding the software.
Rip and replace
Apple used Y2K as a sales tool to get Macs into businesses, including this campaign from early 1999 where the HAL computer from 2001: A Space Odyssey featured in Apple’s Super Bowl advert.
Two years earlier IBM CEO had the company re-orientate an offering that he called e-business. There was snazzy advertising campaigns ran over an eight year period.
Mainframes and high powered UNIX workstations became internet servers running multiple instances of Linux. IBM Consulting learned as they went building the likes of internet retailer Boxman (which would go bust due to IBM’s cack-handed software and the rise of Amazon).
Timely replacement of business systems with e-business systems, paired with new personal computers like the latest Apple Mac allowed the firm to avoid Y2K and make speedier approaches in digitising their businesses.
German enterprise software company SAP launched SAP Business Connector in association with webMethods in 1999, this provided an integration and migration layer for SAP and other business software applications. It also allowed the business software to be accessed using a web browser and for it to trigger business processes like email updates.
Articles (like Robertson & Powell) highlighted the wider business process benefits that could be generated as part of a move to rip-and-replace existing systems with ones that are Y2K compliant. Reducing the amount of systems in place through rationalisation as part of Y2K preparation would then provide benefits in terms of training and expertise required.
Recode
Where rip and replace wasn’t an option due to cost, complexity or mission criticality recoding was looked at as an approach. For PC networks there were a few off the shelf packages to deal with low level BIOS issues
IntelliFIX 2000 by Intelliquis International, Inc. Their product would check hardware, DOS operating system, and software. This version was free and ran a pass/fail test. The full version, which could be purchased for $79, would report the issues and permanently correct date problems with the BIOS and the CMOS real-time clock. In 1999, Stewart Cheifet of the Computer Chronicles rated the product as a very good all-in-one solution for hardware and software.
National Museum of American History: Y2K collection
Products similar to IntelliFIX included Catch/21 by TSR Inc.
Longtime software makers like Computer Associates and IBM provided large companies with tools to audit their existing code base and repair them. IBM’s software charged $1.25 per line inspected. OpenText estimate that there 800 billion lines of COBOL language code out there. So having one of these tools could be very lucrative at the time.
You might have mainframe code on a system that might not have been altered since the 1970s or earlier. Programmers in the developed world who had skills in legacy languages were looking at the end of their career as more of this work had been outsourced to Indian software factories saw Y2K as a last hurrah.
COBOL is still very robust and runs business processes very fast, so is maintained around the world today.
Y2K impact
Professor Martyn Thomas in a keynote speech given in 2017 documented a number of errors that occurred. From credit card reading failures and process shut downs to of false positive medical test results across the world. But by and large the world carried on as normal.
Academic research (Anderson, Banker et al) suggests that the most entrepreneurially competitive companies leaned hard into the Y2K focus on IT and used the resources spent to transform their IT infrastructure and software. Garcia and Wingender showed that these competitive returns were shown to provide a benefit to publicly listed company stock prices at the time.
There were also some allegations that software companies and consultants over-egged the risks. Hindsight provides 20:20 vision.
IT spending dropped dramatically during 2001 and 2002, and by the middle of 2003 technology started to see replacement of software and equipment bought to address Y2K. But the US department of commerce claimed that was no more than a transient effect on economic growth. This was supported by the Kliesen paper in 2003, which posited that the boom and subsequent economic bust was not as a result of Y2K preparation.
The idea of the disruption crisis came from a series of conversations that I have been having in recent times and recent online news.
TechCrunch Disrupt NY 2012 Day Two – May 23, 2012 (Photo: Devin Coldewey)
What is the disruption crisis?
The rise of big tech such as Meta, Twitter, Google, Amazon, Bytedance, Alibaba and Tencent drove a wave of digital disruption over the past quarter century. Now the disruptors are being disrupted themselves and I think that they may precipitate a disruption crisis.
Continuing to look to these digital disruptors is the equivalent of Jimmy Swaggart or Jim Bakker being held up as an exemplar of a good husband and faithful spouse.
Mass lay-offs
Others have talked about the layoffs in more depth, so I have included a video explanation.
I started my agency career during the dot com bubble. We had going for growth at all costs. They talked about trying to move at ‘internet speed’. This was down to the go for growth funding model that drove start-ups through their angel and VC funding rounds and beyond. Common sense was often set aside. if this sounds 180 degrees away from the lean start-up model you’re not wrong.
…Amazon made big bets on long plays, willing to sacrifice immediate profitability to boost its overall position in blue ocean markets. When Amazon’s had to play catch-up, it largely hasn’t worked: the Kindle Phone is maybe the most high-profile mistake/missed opportunity, just to name one. It’s hard to deny that this loss-leader approach has been key to Amazon’s success, although it often made the company a mystery to Wall Street. This would signify a huge shift, totally aside from the 3% of employees who will likely leave the company.
Hacking away at the Devices and R&D divisions is the most perplexing to me. These are the sources of Amazon’s most signature successes, with the Kindle, Alexa/Echo, and Fire TV. They’re what hook customers when they’re still kids, and that customers above all associate with the company, even as they help ensure loyalty and drive their share of media purchases and retail revenue. The Kindle, like the Echo and the Fire Stick, was always supposed to be a loss leader: you sell the razor at close to cost and make your money back selling the blades. How many books has Amazon sold because of the Kindle? How many Prime subscriptions? How many impulse purchases do people make on their Echos and Fires?
Tim Carmody, Loss Leaders. (Issue #50) Amazon Chronicles
Consultants have taken the idea of transformative technology and scrappy startup methodologies to try and reinvent business, or facilitate digital disruption. The problem is that the examples they use as exemplars are failing, casting doubt on their doctrine and fuelling a disruption crisis in boardrooms and the consultants that advise them.
Unilever – a cautionary tale
For instance, I contracted at Unilever. I worked rolling out digital brand assets for their Family Brands product line. This was a line of margarines, due to organic growth it has different names in different markets:
Blue Band
Country Crock
Flora
Fruit d’Or
Margarina Primavera
Plantta
Rama
While I was doing this work, I worked closely with the Becel functional foods and Bertorelli brands. Family Brands was being put into a separate business to develop a ‘startup mentality’. The thing was Family Brands hadn’t been a startup for decades. In fact, it hadn’t been a startup since the 1870s when Antoon Jurgens branched out from trading in butter and started to manufacture margarine. His company merged with rivals Van den Bergh’s, Centra, and Schicht’s to form Margarine Unie (Margarine Union) in 1927, by which time it had a dominant position in margarine manufacturing.
Three years later, Margarine Unie merges with Lever Brothers Limited to create Unilever and the rest was history.
Margarine as a substitute good
Margarine historically was a substitute product for butter. My parents (both of whom came from farming families in Ireland) used to talk about how poor children in the towns would have eaten margarine rather than butter. As a child, we might use margarine to bake a cake, but if we wanted the cake to keep a while my Granny or my Mam would only use salted butter. Despite butter (which we kept in the fridge) being so hard that it might break up the surface of the bread, we used it on our sandwiches, toast or to fry with. Margarine just wasn’t the done thing.
One of the most damning things that my Granny once said about a friend of hers was:
She uses margarine to make the ham sandwiches when you’re invited around for a cup of tea.
One of the first courses that I had at university was in economics, where they used margarine as an exemplar for a substitute good.
Healthier option
Margarine started to be considered a healthier option due to concerns about heart disease and cholesterol. Much of this was down to Flora, invented in 1964, which contained polyunsaturated fats derived from sunflower oil. At the same time wholemeal bread started to become preferable due to the requirement for fibre in the diet.
Yellow fats category decline
However Although 21st century sales declined as many consumers switched to butter. This was down to changes in consumers wanting a more natural product and heart health improvising. In the five years leading to 2014, sales of margarine fell 6%, while sales of butter rose 7%.
It was in this atmosphere that the startup narrative was fired up for Family Brands.
The other shoe dropped when Unilever narrowly managed to fight a hostile bid from 3G Capital a couple of years after I was there. Paul Polman got rid of business lower margin businesses as an attempt to increase earnings. These were still great businesses which is why KKR were happy to take the business off Unilever’s hands.
Unilever didn’t spin out a startup. It wasn’t disruptive thinking, it was an act of desperation to fend off takeovers or possible greenmailing. The problem with with this is Unilever now has a lot less buying power on global supplies of oils and fats needed for its ice cream, mayonnaise, food additives and personal care businesses – which was the rationale for forming Unilever in the first place.
Foundational technologies in crisis bringing crisis
Foundational technologies were cited as new elements that would cause digital disruption. The fall of these technologies and the companies that have championed them have fuelled this disruption crisis.
Cloud services
Microsoft and Amazon both saw declining sales in SaaS and related services, as businesses has less employees and needed less seats. Amazon has been cutting deep in its R&D function and devices. This means that Alexa for the hospitality industry and health sectors are likely to be borrowed time.
Web 3.0 (blockchain, NFTs, cryptocurrency)
Here’s what my friend Nigel Scott had to say about FTX on LinkedIn:
There has been a lot of commentary over the weekend on the #ftx #cryptocurrency #exchange collapse
A lot of words have been typed and spoken but in the end I think the numbers probably sum it up best
Back in 2018 there was an estimated 200 Crypto Exchanges scattered around the globe
Over the past 3 years an estimated 200 Crypto Exchanges have either collapsed or disappeared
This rate of attrition is nothing new. Back in 2014 – after the Mt Gox event – it was estimated 45% of all #Crypto Exchanges had either collapsed or disappeared
The harsh truth is the risk of failure has always been central, rather than peripheral, to the Crypto Exchange model
Today there are almost 600 Crypto Exchanges open for business
The only question that needs to be asked is what fraction of them will still be in business in 2023, 2024, 2025 and beyond?
and, more importantly, what is the probability of picking a survivor, never mind a winner, in such a volatile environment?
Which is to say, contrary to most of the commentary I have read over the weekend, the #ftxcrash isn’t the exception, it’s the rule – what makes it exceptional is the scale, not the probability of the failure
Blast radius
One edition of the Axios Login newsletter used the headline ‘blast radius‘ describe the impact that FTX and other crypto economy problems were having on the wider Web 3.0 ecosystem of decentralised services. Creating a disruption crisis.
Less than four years before disruptive technologies had become mainstream when IBM brought a ‘better way’ of managing supply chain for Walmart by putting their heads of lettuce on the blockchain. Just writing that last sentence made me like my IQ number was dropping; but just four years ago, this was a point of validation…
Metaverse
Prior to Meta’s recent financial results and job cuts you had the likes of McKinsey cheerleading for the metaverse.
With its potential to generate up to $5 trillion in value by 2030, the metaverse is too big for companies to ignore.
To give you an idea of how far we are from the much vaunted metaverse, have a look at my discussion paper.
Social media marketing
Alphabet has seen a decline in YouTube advertising and search advertising is down by about a fifth in October. Twitter is heading towards bankruptcy as brands stopped advertising on the platform. Meta has also shown a decline in advertising revenue. Snap is doing much worse. TikTok seems to be the outlier.
Accenture and the disruption crisis
A quick search of Accenture and disruption yields about 628,000 results. Accenture has latched itself onto disruption in the same way that IBM glommed on to e-business during the first dot com bomb, Sun Microsystems became the ‘dot in dot com’ and the whole of the entire enterprise IT industry latched on to the millennium bug.
Better than ‘the dot in dot com’
Some bright minds at Accenture came up with a concept that was ownable, not time-bounded like ‘e-business’ or ‘the dot in dot com’ – you’re kind of done when everyone has a website that can do transactions of some sort.
Sun Microsystems advert circa 2000
Accenture welded itself to disruption with the Disruptibility Index which looks at how disruption affects different vertical markets.
Dark thoughts
Disruption tapped into deep negative behavioural emotions. Fear, uncertainty and doubt. As tech executive Andy Grove had constantly repeated ‘Only the Paranoid Survive‘. Disruption didn’t necessarily promise a thriving business due to sustained competitive advantage, like earlier generations of technology companies and consultancies. Instead it promised, merely survival in a globalised hostile world, with constant waves of disruption coming at the c-suite. This is the business equivalent of Adam Curtis’ video essay Oh Dearism.
This gives your internal champions on the client side a bit more political space if their digital transformation projects doesn’t hit all the goals that we would like it to hit.
Of course all of this could come off the wheels if a great disruption crisis hit, wouldn’t it?
The disruption crisis doesn’t just toll for Accenture
It would be remiss of me to just single out Accenture. They have been part of a much bigger movement across professional services, finance, the technology sector and academia. Here are some of the people across academia have had a similar idea to Accenture; they’ve written books like these over the past 10 years or so:
It has been the fodder of countless conferences around the world. For example here’s a representative of Euromonitor International speaking at a conference of the International Homeware Association (IHA) on digital disruption.
I am not putting this in here to make fun of the IHA – it is the professional association of a market worth 80 billion dollars a year globally and deserves our respect. Globalisation has centralised a lot of homeware production in the Far East due to globalisation over the past quarter of a century; but it still plays a central, if less visible part in our lives today.
Instead I am using the IHA as an exemplar of how digital disruption has pervaded all parts of the economy as a central organising principle in modern business thinking.
