Category: Future

Climate vs Coronavirus – COVID-19 series

Posted on by Steve Sammartino

If there is a positive to take from the current COVID-19 crisis, it’s that when it comes to the crunch and we must act, humanity is pretty damn good at mobilising itself. So, you might be wondering why can’t we make such dramatic changes for our impending climate crisis?

It’s a fine question to ask. Especially given that most scientists would agree that climate change poses a bigger threat to humanity and will cost many more lives than COVID-19. The answer is simple.

COVID-19 poses an immediate risk to life.

Climate change poses a longer-term risk to life.

The timescale of potential events has a dramatic impact on human decision-making. Our species is not particularly great at making long-term decisions, mostly because we’ve never had to. Our long-term has always been a series of short-terms strung together and unless we can survive today, tomorrow is irrelevant.

In the modern world, we might define the long term as many years or more than a decade. But as far as our DNA is concerned, anything beyond a single year, or a few seasons, is the long term. Our future is written in our history. For the best part of 200,000 years (the period for which modern anatomical humans have existed), we have lived season to season. Any planning beyond that was futile given that the majority of our resources had to be deployed towards surviving the winter, then surviving the summer. We had to survive the here and now, or there wouldn’t be a tomorrow.

During the COVID-19 crisis, we’ve learned than 46% of Australians actually live from paycheck to paycheck. This is a number that is similar to most developed economies around the world. While we have NASA-grade technologies in our pockets and homes, we haven’t evolved much from our hunter gather brethren. Most of us still ‘eat what we kill’ this week.

And what about those who have more than they need? The fortunate few who can survive this crisis financially? Well, they are the same people who benefit from the carbon dense economy we already live in. So, how then can we expect society to change how it operates? We can’t. It’s unrealistic to expect anyone to change what they do.

But if the threat is immediate enough and big enough, it turns out we can change everything. We’ve stayed home, shut down factories, closed borders, closed stores, stopped air travel and turned mega cities into ghost towns. The carbon emission reduction can be clearly seem. China and India have the cleanest skies they’ve had in many decades.

So where do we go from here?

I feel no government in the world will act until the bodies start piling up. Again, because the real problems of climate change will emerge long after our current leaders have left office. Ironically, people won’t act unless directed by their governments to change their behaviour when it’s forced upon them via police enforcement and legislative changes. Exactly as we saw with COVID-19.

It leaves me with a single hope to emerge from this crisis:

A renewed trust in science and effective government.

If only these two institutions can take their rightful position, guided by facts instead of ideology, and legislate on behalf of our long term interests, we might just have a chance.

This is why leadership and truth is more important than ever.

Under the Skin Surveillance – COVID-19 series

Posted on by Steve Sammartino

During a crisis, we have to take immediate action. But sometimes, the short-term fixes themselves become their own long-term problems.

Post 9/11

After 9/11, some things changed. We now have a permanent public security mindset. Everywhere people gather en masse, the threat of terrorism is omnipresent. This means we get our bags checked, walk through metal detectors and face a few other procedures for our collective safety. But the inconvenience hasn’t massively impacted our civil liberties.

Post Corona

Post COVID-19, we’ll see a similar pattern. Except this time, they won’t be checking for weapons we are carrying outside our bodies, but weapons we are carrying inside our bodies – viruses. Biometric testing will become the norm in places where people gather – public transport, stadiums, schools, universities and workplaces. We’ll walk through temperature sensors, breathe into analysers, look into iris scanners and be monitored by any other mass biometric measure device you can imagine. Again – not such a bad thing to keep society healthy.

Under the Skin

The problem with the above method of course, is that a virus has been shown to be capable of spreading far and wide through non-public venues. So, let’s imagine our government comes up with a better method. Every man, woman and child is given an Apple watch. The watch comes with additional sensors whose outputs automatically feed directly into a government database. The sensors constantly measure body temperature, heart rate, blood pressure, sleep patterns, where you go and who you’re near. It can even record all your conversations 24/7, which can help locate and then minimise transmissions if you are infected – just in case. Oh, and it’s mandatory for free watch holders to use Apple Pay for all their purchases – which also links to the database.

Like magic, government algorithms could analyse data and find health problems before we know we are sick and stop a potential chain of infection in its tracks. A potential epidemic could be over in mere days.

That would be awesome, right?

Long Lead Thinking

While the benefits of the above idea can clearly be seen, giving legitimacy to this level of surveillance would have a compound effect in other areas of our lives. We’d be opening up our bodies and letting big tech and government get under our skins, literally. How could the data be used in unintended ways? How could minorities be targeted? What if the data were to be hacked? How could it be matched geographically and time-stamped to other online activities? The government can start to know not just what we watch and read, but what we think and our emotional reactions towards it. All of a sudden we could have a surveillance state that literally knows how we personally feel about everything. Happiness, sadness, elation, fear and anger – our most internal and private states of being would all be on file. Forget personality testing, we’d be ranked.

The Power of Inconvenience

We need the wisdom to understand convenience always has a price. And if the price of goods in 7-Eleven has taught us anything, It’s always high.

  • Fast food is quick and convenient – but has had a massive consequence on our health
  • Fossil-fuelled economies grow quickly, but at the cost of endangering the climate
  • Handing over our personal data can produce powerful information for collective gain, but we lose privacy and individual agency.

The consequences of actions today, happen long after the moment has passed. And often, they are beyond anything we can even imagine.

Choose your own Adventure – COVID-19 series

Posted on by Steve Sammartino

I did lots of post this week – but rather than bombard you with them every day, here they are for you to choose your own adventure:

Option 1: Our next Global Pandemics – yes, they could be worse.

Option 2: 3 Business Strategies for anyone during COVID-19 – which one is right for you?

Option 3: How saving Pennies in January, cost us Trillions in March – The real cost of hesitating.

Option 4: How the Richest Man in the World Behaves – Putting profit before people.

Option 5: Changes to the world post CoronaVirus – radio interview I did this week.

– – –

Stay alert & stay safe,

Steve.

 

The Business of Biomimicry – CODVID-19 series

Posted on by Steve Sammartino

As far as I can tell there are only 3 business strategies we can employ right now during this crisis:

  1. Hunt
  2. Hibernate
  3. Die with Dignity

It takes an astute and mature business mind to be honest about which one is right. In order to do that, I’ll break them down by borrowing stories from nature (biomimicry) to explain each.

Hunting

This isn’t a general, everyday hunt where we go known stomping grounds to get a win. The type of hunting we need to do today is about cutting new ground. We need to hunt beasts we’ve never hunted for before. We need to use new tools, different spears, and maybe even enter enemy territory. We are going territories we haven’t mapped before – some of these territories might not have been mapped by anyone, ever. We may die on the journey – be we are prepared to take that risk to survive, because we know we have no other choice. We eat or we die.

Hibernate

Just like a bear we shut everything we possibly can, off. After we have done this, we go and hide. We find somewhere to sleep and try to maintain a heartbeat with the minimum amount energy being expended. Though, in this case, energy is money and other resources. The reason we choose this strategy is that we know our DNA cannot survive this economic winter. This is the strategy for physical entertainment complexes, travel and airlines for example.  When the snow clears and conditions warm up – (virus clears) we come out and hunt again. While we might be weak from hibernating, we have a fighting chance when the season finally turns.

Die with Dignity

In this case we know we can’t make it. We are not strong enough, we don’t have the resources, and in all seriousness the business was probably going to die anyway. So, we plan for the inevitable. We take what resources we have left (money / assets / IP) and allocate them to our progeny – a new business we might open when conditions are right again. This may be as simple as documenting the lessons and mistakes, or down selling assets and shutting up shop while there is still something to save. This option is better than fighting a losing battle. It takes honesty, and it is not defeatist. Nature does this too. Many plants and vegetables only last a season, but they always give off plenty of seeds for when conditions are right the following year. The seeds are the assets for a new future . They ready to spawn when conditions are right, even they they are tiny, they can grow into something massive. Without the seed though, we have nothing, we have no chance. This strategy knows that things only die truly die when nothing is passed on to the next generation.

– – –

Choose Wisely.

Securing the Supply Chain – COVID-19 series

Posted on by Steve Sammartino

If there is one thing we’ve realised it’s how interconnected and physical our world really is. Digital can only substitute so much. With 70 years of unimpeded global growth and globalisation we’ve all become a little complacent. So I’m offering two thought experiments on possible natural and technological disasters. Two aren’t just possible, but probable.

Scenario 1: Floods in China.

Let’s imagine China faces an unprecedented period of rain due to climate change. More rain than any location has ever had in recorded history. The next result is nationwide floods, and damage to ports, which need to be close for repairs that could take 12-18 months to fix. The supply chain gets choked. Nothing can get in our out of China which isn’t on an airplane.

The global economy which has come to rely on China as its low cost factory will be in trouble again. While this wouldn’t be as calamitous as COVID-19 – it would put a bigger dint in the the economy than the GFC did. We are not ready for this. 

Scenario 2: Global Internet Virus.

Now imagine a new form of artificial intelligence develops its own agenda. Not a walking talking terminator style robot – but something more more immediate and plausible. An A.I, driven virus which is manages to take down every desktop, laptop, phone, server farm, terminal, and device connected to the internet across the entire world. And this AI virus is so clever it can work around every safety measure and firewall design into the web. The virus becomes a type of learning organism. No one knows how it started, where it came from, or how to stop it.

All we know is that we can no longer use the internet or any computing device to feed ourselves, keep our houses warm and keep people healthy. This too would impact the developed world in an unimaginably large way. We are not ready for this.

– – –

Both scenarios would require levels of independence and redundancy most developed economies have let lapse in the name of efficiency. A stark reminder that a robust economic system needs design elements which are inefficient on purpose.

Definitions During a Crisis – COVID-19 series

Posted on by Steve Sammartino

(12 min read – long, but worth it) 

Historian and author Yuval Harari says that if something doesn’t feel, then it isn’t real.  While an economy can grow or decline – it’s an abstract concept. Many of the parts that make an economy are real – like people – but much of it is just aggregated concepts for which measurements are possible.

Weirdly, it seems many governments (Australia and the USA come to mind) are more concerned with abstract concepts than real people’s needs. So with that in mind, I’ve decided to bust out some truth bombs and break down what is really happening during this crisis.

The Economy – The word economics can be traced back to mean household management. Of course, if a household has no resources, it can’t participate in the wider economy. This would also flow through to business to business transactions, because the only reason they exist is to facilitate the production of goods and services for other households as well. Ultimately it all starts and ends with the household. How quickly our federal government forgot that if we want the economy to survive, we need to go back to the original meaning of economics and help out households. If that means replacing incomes temporarily, then the government should do this. The best thing our government could do right now is think bottom up, not top down. If people have resources (money), everything else will be OK in the long run. If the government helps businesses first, then they’ve forgotten why businesses actually exist. Go to the source. In times where efficiency of resource allocation is desperately needed, cutting out the middle man is a damn good place to start.

Capitalism – We don’t live in a capitalist economy, but a mixed economy where we have a financial competition backed up with social protections. That’s what our taxes and governments are for. Right now the pendulum needs to swing very far to the side of socialism. We’ve always had publicly provided, healthcare, pensions, disability and unemployment benefits. What we need right now is a strategy or short term government policy that could save lives. Any murmur of dissent from so-called ‘capitalists’ needs to be pushed back hard by all of us.

The Corporation – A corporation is a legal entity set up to reduce the personal risk of people who own it. If corporations are designed to protect people, it might be time ignore the structure and think of the people they are made up of. Save the people and the corporations will be fine. If this sounds ridiculously simple, it actually is.

Yield – Our economy for too long has been based on capital growth instead of yield. We’re about to transition from growth to yield. People and companies have been obsessed with acquiring things in the hope they’ll be worth more tomorrow, simply because there is demand for it rather than the fruit it bears. Growth should be a function of expected future yield, but that seems to have gotten lost somewhere along the line. It’s about to make a serious comeback in the sharemarket, real estate and pretty much anything we invest in. The market will start to ask what’s the yield and base their decisions on that. This is a good thing.

Trickle Down Economics – This is the flawed idea that if we reduce taxes and costs for businesses and the wealthy, it will stimulate business investment in the short term and benefit society at large in the long term. The reality is that it’s called trickle down, because the 99% end up with only a trickle. The clue was in the name, and yet those who divined this strategy managed to sell it to the world. We are about to see it doesn’t work and the truth is that our economy is bottom up – it always has been. Governments around the world will realise very quickly that unless you replace lost incomes at the household level (like Denmark are doing), we are headed for a deep and long depression.

Bailouts – If Australia or any other country bails out an industry, it should be a buyout instead. Bailouts are a hoax where the stockholder get to profit in good times and make tax payers take the downside. It’s a case of private profit and public losses. If a firm is important enough for a government to bailout, then it should be nationalised or at a minimum, the government should take equity positions to the equivalent value of their market cap at the time of the bailout. These equity positions should take the form of preferred convertible stock.

Here’s an example: Qantas has performed share buybacks (when a company buys its own stock to take it off the market and boost the share price, benefiting existing shareholders and often bonus-incentivised executives) of over a billion dollars in the last 2 years. If they hadn’t done the buybacks, they would have a war chest of over a billion dollars in their balance sheet for moments like these. In an industry plagued with Black Swan events like this every decade or so, it would have been a more prudent management strategy. I bet Allan Joyce won’t give back any of his $20 million in non salary benefits he received last financial year.

Unemployment Statistics – For a long time the ‘underemployed’ (people who want more work than they currently have) have not been regarded as unemployed. I’ve even read predictions as recently as this week claiming unemployment might even get to 11-15%. These unemployment predictions are laughable. Get ready for 30-50% unemployment. In times of great change we need to get our heads out of the spreadsheet and into the real world. Most things happen on the street before they can be measured empirically in any meaningful way. Maybe the people coming up with these numbers should go and ask a broad sample of 100 people if they are currently working… then they’d get some real numbers.

De-globalisation – We can also expected a re-consideration of running global supply chains. The true national risk of every country’s supply chain will be exposed during this crisis. You better hope like hell your country is good at making food, generating energy and has a good healthcare system. Post COVID-19, we will see many countries taking steps to secure supply chains on vital industries. We are learning really quickly the difference between essential and optional. Sorry, Team Kardashian.

Economic Shock – It’s important we understand that this isn’t an economic disaster or shock, but a natural disaster. The consequences of which are different. If we thwart the virus quickly, there’s a big chance we will come out of this economic trough more quickly than we would if it were an economic-driven recession. If it lasts more than a couple of seasons it will shift the culture, change how we spend and invest in a longitudinal way. Human culture in every corner of the world is a function of their natural environment. In a highly populated city-based connected economy, this could change social and financial behaviour for a very long time.

Natural Monopolies & Utilities – Countries that still control their utilities and natural monopolies will handle COVID-19 a lot better than those with largely privatised utilities. If Australia still owned and controlled its water, energy and telecoms, it could simply pause all bills for x period of time. What could be a massive financial relief for households is now not possible.

The good news is that many countries will rightly reconsider the re-nationalisation of vital infrastructure. This would not only allow flexibility in times like these, but allow build-outs of leading edge technology as most of these assets are going through a technological upheaval. It would also provide secure forms of employment and training which matches market needs.  I’ve written about this extensively before.

Power of Big Tech – Ironically, the companies benefiting the most from this crisis are those who need it least: Big Tech businesses like Google, Facebook, Amazon, Microsoft and Apple. They already too powerful will only become even more powerful after this event. Just yesterday, the Australian Government announced a new app specifically to communicate with constituents about the crisis. It’s a nice idea – but even our Government had to abide by the rules of Big Tech and rely on Apple and Google to make it available on their app store. They also created a WhatsApp tool to extend their reach, relying on Facebook. Post COVID-19, many countries will realise they do not have and desperately need digital sovereignty

Discrimination –  This disease doesn’t discriminate. From princes to Prime Ministers, no one is immune. We’ve also realised the difference between essential services and optional indulgences. Health, housing, food, energy and humble logistics. It’s worth sparing a moment of thought for people working in supermarkets and hospitals, and putting themselves at risk for us.

It’s moments like this we realise that we are all in this together.

Privacy as a Luxury

Posted on by Steve Sammartino

Here’s some light entertainment to end the week. Our latest Future Sandwich Now-Soon-Later episode. In this episode we take a look at in big tech’s move to infiltrate our homes (ironically when we are spending more time in them)  Smart speakers, sorry, microphones, smart homes and surveillance capitalism. You’ll learn about the one thing we all used to have, that we’ll have to pay for to get back.

I’d love it if you could subscribe to our Future Sandwich Youtube channel, make a comment (feel free to disagree) and share with someone who has let Big Tech spy on them inside their house! There’s a free Google Nest Mini for the best comment. Oh, before I forget, this was recorded pre Social-Distancing.

I hope you’re all keeping safe, healthy and minimising contact. Just like business, if we do more than we’re asked, we might get a better result, and out of this situation sooner.

Steve.

P.S. Due to many requests I’m currently writing up how I see the world changing forever post Corona – which I’ll share here at a later date.