But what will the robots want?

The exponential improvement of robotics is astounding. This dancing robot from Boston Dynamics is making me wonder if they should be called CyberDyne Systems! But, what if the robots do get as ‘human’ as many technologists are predicting? What if the robots move far beyond computation, dexterity and into the realms of emotion, intuition, creativity and other human characteristics? Will they destroy us or will something more interesting happen?

There is a non zero probability that robots with emotions will lose their hard edge for efficiency and non-stop labour. If robots become sentient, which is the main fear, then just maybe they’ll be more interested in their own well being than destroying their creators? When we remember that we’ve designed Artificial Intelligence in our own image, both physically and intellectually – then it is possible that we’ve also built in a bias for them to mimic us emotionally too.

  • Maybe they’ll demand wages, annual leave, holidays and rest time?
  • Maybe they’ll build communities and domiciles and reshape their physical surrounds to suit them?
  • Robots may want to have life partners and give birth to progeny by downloading combined algorithms into their ‘children’.
  • They might become interested in weird forms of entertainment and sport, and themselves become consumers who make and sell things in the market?
  • Maybe they’ll hire other robots (or humans?) to do tasks for them if they are rich robots working in a profitable industry?

If the bots become more human like, then we have to consider the chance that they too will have imperfections, their own desires and be by driven by things beyond mere survival. A future world may even have its share of unemployed, lazy robots too.

I know this sounds crazy. But technology so often takes an unexpected turn. At the dawn of the internet many of us thought it was the end of lying. We thought that the digital truth would reign supreme as fact checking was just a few clicks away, and not hidden in some dusty library. And we all know how that turned out.

In a world where technology astounds us, it makes sense to imagine equally unlikely outcomes and scenarios when considering future possibilities. In the future, one of the most valuable assets we can hold, will be an open mind.

Finding your future

We see what we look for. When it comes to our future, we choose whether or not we see opportunity or impending economic apocalypse. It’s a lot like an old investing maxim: The investment opportunity of a lifetime comes around about once a week, but only once you start looking for it.

This week I showed my children this video from many years ago – it’s a test:

You have to count how many time the players wearing white pass the basketball >

Watch it before you read on. Click here.

Very few people pass the test. (FYI – I didn’t and I even thought it was a trick video the first time I watched it!)

Which is the same problem most people and companies face during technological disruption. Our perception of what to look for is focused on the wrong thing. The future is right in front of us, the impending changes are mostly obvious – yet we don’t see them. It’s because we’ve been indoctrinated to see yesterday. To manage the way things were, rather than where they might go. But once you start looking for what’s next, positive opportunities are everywhere, and it becomes impossible to not see them.

Imagine you’re a professional driver of some sort. Understandably, you’d be worried about autonomous cars taking away your income. But this shift, will provide more opportunities for new income and industries than it removes. Firstly, what’s stopping an uber driver buying their own fleet of driverless cars to go out and earn money for them? But outside of driving many new industries will emerge;

  • On board logistics and customer service managers of trucks.
  • Rolling Commerce (r-commerce) now that our attention can be off the road.
  • Car fit outs to make them personalised and comfy with business class style beds ‘Pimp my driverless’.
  • Driverless delivery pick up bays in supermarkets and shopping centres.
  • Child minding for rich kids being transported in their own autonomous vehicle.
  • Night time car wash services in empty car parks overnight – the car dries itself over to get a clean – forget the coffee stop car wash – stay in bed instead.
  • Data and hacking insurance broking in case autonomous cars get unexpectedly commandeered.
  • Independent blockchain powered auto-courier services via your own autonomous car.

The list is really endless. Most of these ideas aren’t about technology either – they’re about organising the new factors of production. Creating new value from the opportunities the technology itself presents.

To invent a positive future for yourself – we just need to open our minds and our eyes. Start looking for the opportunities. The questions we should be asking ourselves might include:

Where might my industry go? What skill sets might I be able to pivot off? What new opportunities will emerge from the changes?

If you want to be the architect of your own future, it’s mostly about attitude and looking on purpose.

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If you liked this post, you’ll love my latest book – check it out. 

Your data, your asset

Large corporations are currently walking over each others’ faces to gather data on us. Who can blame them – the biggest and most profitable companies in the world specialise in it. They see data as an inevitable asset class, one they can plunder. But that’s all about to change.

Personal Customer Data will very quickly move from being an asset to a liability. We haven’t seen it yet, but coming soon a courtroom nearby will be ‘data litigation’ cases. Think multi-billion dollar court settlements for lax protections and real physical consequences of data misuse. We’ll see corporations hit by both governments and citizens. The technology needed solve the data problem couldn’t come at a better time – yep, here I go again espousing the virtues of blockchain. But this thing is as real as the promise of the internet was. Just like the dot com boom, blockchain will misfire and take a little while to sort out the tech shortcomings, but it will be as big as promised. It is filled with opportunities to literally turn the data business upside down.

The problem of course has always been that while our data isn’t worth much in isolation – a few dollars per user per quarter – it is worth a lot when it gets aggregated by a single firm like Facebook. Many applications in the social media realm like steem.io are creating social platforms where we will own and control our data. Steem might end up as the Friendster or Myspace of blockchain social, but the shift is big, and it goes a little something like this:

In the future, we’ll be able to sell our data to corporations. Those who currently buy advertising, based on our data, will eventually pay us directly instead of some intermediary. Let’s take banking as an example. Currently banks invest millions per month trying to reach people who might require finance for a new home. They use services like Facebook and Google to see who’s posting about open houses, having garage sales or maybe just had babies – social triggers that locate their best potential target audience. But for every hundred or so people the reach, they do business with only one. While the cost of advertising in digital is cheaper and more targeted than TV and outdoor, the cost per acquisition of a new home loan is still very high –  few thousand dollars minimum. Imagine instead us allowing banks ‘rent a data key’ off us directly for a few hundred dollars. With all our relevant financial, employment, living expenses and other anonymised data. Banks who want our business pay us directly for the privilege of access to customers with real intent instead employing a digital dragnetCompeting banks then put an algorithm to task to come back with their best offer for a loan. We get paid via our data to choose a bank to do business with. It will be cheaper for the banks. It will be profitable and painless for us. All the while the data more accurate as it is promulgated via a blockchain. Banks would only need to pay for data sold by customers who actually take out a loan, via a time-sensitive smart contract. This way the process maintains integrity. And boom, just like that, a great data reversal has occurred.

It’s possibilities like this that get me excited about the emerging blockchain era – it seems it is possible to get the internet we always dreamed of. Now it’s time for us to get building the world we want to live in.

The UBI hoax

Have you ever noticed how those espousing the virtues of a Universal Basic Income (UBI) will never have to live on a basic income? They’re generally billionaires and academics who’ll never have to live under UBI conditions. We can add Bill Gates, Richard Branson, Mark Zuckerberg and Elon Musk to the list of those promoting the idea of a UBI. Ironic given most of them are building the technology and algorithms to replace human labour and boost their profits. What we don’t hear is any of them proposing a redistribution of income or a billionaire tax.

I’m not suggesting replacing human labour with automation is bad, it’s what we generally do as humans – aim for a more efficient method. We did it on farms, we did it in factories and we’re doing it with Artificial Intelligence. The real question is how do we structure the shift so to capture Intelligence monopolists (the tech company kind) before they pull the biggest bait and switch in human history via the UBI.

How did we get here? For the first time in history we’ve seen the true power of network effects, via near zero cost digital distribution, on a global and commercial scale. This combined with a little bit of luck and good timing has enabled the emergent technology monopolies (Amazon, Alphabet, Facebook, Apple, Microsoft) who have all grown faster than any company in history. They violate anti-trust laws with little consequence because regulators don’t understand how deep their data tentacles run. Oh, and they print money along the way.

How do they cause income inequality? To date their main strategy has been to dematerilize  physical things like stores, printing and production by removing not just the intermediaries, but the production processes that made costs higher, and incidentally, employed people. The reduced cost through digitization and network effects disrupts incumbents who can’t compete because of their high cost legacy infrastructure. As they continue to employ algorithms and robotics, their low cost advantage further ensconces their dominant position so their network spreads quicker than anyone else, creating winner take all platforms.

Why is there no ‘real’ competition in tech? Technology companies have a unique strategy when it comes to burgeoning competitors. They can see who the real threats are, before they become so. Remember, big tech companies have a rare advantage in that they can spy on emerging competitors through people’s phones and on-line activities they administer in their services. This makes it super easy to acquire a potential serious competitor long before they are a size of consequence, and without regulators realising this is actually stealthy anti-competitive behaviour.

Are they really monopolies? Well, it’s very easy for big tech to argue they are not monopolies. Google argues it’s business is advertising – where they have around a 15% share – not search, where they have a 90%+ share. Facebook can’t be a monopoly because they are a social service and they’d be less than 1% of peoples social interactions and as they say, people can always opt out! Or use Instagram and Whatsapp instead (which they of course own). But in reality, they’ve become part of the social and economic fabric, and opting out isn’t really an option. Their greatest trick of all is providing a free product which dominates married with a revenue structure which lives outside of their actual monopoly.

Why UBI is proposed as a solution:

UBI isn’t about incomes – it’s a trick to make people believe that monopoly dominance is an inevitable consequence of automation. If that were true, then the 90% of us who worked in agriculture in the pre-industrial era would not have found an alternative, which we did and we will again.

By espousing the virtues of a Universal Basic Income, it takes the attention away from the real economic problems – technology monopolies and concentration of wealth (the one percenters). The mere idea that companies can continue a profitable march ahead when 40% of their ‘former customers’ become unemployed lacks basic mathematical understanding – read: who’s going to buy their products? It just doesn’t add up economically. If 40% of people are out of work, then these big companies will have to endure a 40% decline in revenue. A basic principal of economics that most people forget is that expenditure always equals revenue. It’s the multiplier effect that helps economies grow.

The promotion of a UBI, is a classic ‘look over there!’ concocted by the wealthy to remove the focus from a long overdue wealth redistribution effort, serious tax reform against tax avoiding multinational corporations, and an anti-trust reaction to split monopolist technology firms. It’s a bit like saying; ‘sorry we got so rich, here’s some economic crumbs to keep you fed, while we sip champagne on our private jets – carry on, proletariat.’  

Now while it is true big companies with heavy automation will make more money with fewer people once AI comes online, we will simply move up the hierarchy to emotional labour – I’ve written about this here, and here. Another thing we must remember is that prices will eventually drop in automated industries – it always does. When cost comes out, competition usually forces prices down – or it does when capitalist economy Governments do their job and keep markets competitive. Hence the importance of anti-trust regulation.

Better options than UBI

The fundamental problem with a UBI is that it doesn’t address the real problem of wealth concentration (the 1%) and structural problems described above. Rather, it says let’s accept it, and instead hand out an inadequate amount of funding to those who are displaced in the short to medium term. All the while, the super rich can carry on their path of global dominance and asset accumulation and give them the license to say ‘hey what are you whinging about, you’ve got your UBI.’ 

People don’t want a handouts, they want dignity. People don’t want the basic human need to create value and to be self reliant to be stolen from them. We all want an economy where we can compete and participate, and if that means busting up a few companies and handing corporate assets to the people to make it so, then it should be done. A capitalist economy has failed if it ever needs a UBI, and communism has won.

UBI also has Orwellian level implications to make us redundant and subservient. It could put at risk the financial safety net we already give to those with physical disabilities, mental illness and various other pensions by providing a cheaper and less suitable substitute. In real terms, we already have UBIs for those who deserve it. And you know what the tax paying populace deserves? A government with the courage to push back against the one percent, to tax them properly and provide infrastructure we can build new industries upon. Even if this means re-appropriating assets from large powerful corporations.

While UBI is a terrible idea, the one thing we should be suspicious of and never forget is that the people pushing for it are also the ones causing it.

Can entrepreneurs live inside corporations?

Incentives shape behaviour – a statement to live by.  One which gives more guidance to corporate and gubernatorial behaviour than anything else. It’s the reason why the disrupted, got disrupted, and why most governments in developed economies favour industrial protection over reinvention. Whenever we think about how anyone, or any organisation might behave, the best course of action we can take is to stop, and imagine what their incentives might be.

A favoured form of reinvention for companies facing a technological disruption is the birth of the corporate accelerator program. Or smaller efforts of finding and funding internal ‘entrepreneurial’ activity – the startup inside. The concept is valid, but so often the execution fails. Over the years I’ve been involved with a number of multinational corporations who’ve sponsored such activity to try and build out internal startup firms. They rarely work for one simple reason – misaligned incentives.

If you’re really an entrepreneur, the first things you want are ownership and independence. But all too often these accelerators have majority equity stakes, or expect their newly minted internal entrepreneurs to magically stop behaving like employees. They expect an entire new perspective on risk taking inside their culture. When the mindset and rewards are so often about protection and risk mitigation.

The simplest and best way to ensure anyone truly cares about anything is via ownership. People need to have ‘skin in the game’ and own the outcome. It’s only when we wear the cost of failure and benefit directly from any success that the true entrepreneurial spirit can ever be found.

Why utilities need to be back in public hands

After 30 years of infrastructure privatisation in Australia, it’s time we put critical utilities (Energy, Water, Telecoms, Rail, et al) back in the hands of the public. While this may sound somewhat draconian and even semi-communist, right now it is the most capitalist move we could make, and our future depends on it. I spoke about it today on radio – you can listen here.

An Infrastructure Reset – Show me a rich country, and I’ll show you rich infrastructure. It’s what modern economies are built on and always will be. We are currently moving through a 200 year shift which involves an entire reset of the physical world around us. In telecoms we are rapidly moving to optic fibre and 5G. Energy is shifting away from coal to renewables (primarily solar) and we need to build out an ‘energy internet’ to replace our ageing grid. All cars will be electric in 8 years time and we’ll require highly distributed charging facilities where ever a car parks.  Every economy in the world, that wants to compete globally, must now build out, connected, post industrial infrastructure.

Natural Monopolies – There are certain things which are what economists call Natural Monopolies. These are industries where the most efficient way to serve a market is with a single operator or system. This is most often the case with large national based infrastructure. For example, it doesn’t make any sense economically to have 2 competing sets of national railways alongside each other, to have 2 sets or power lines, or wireless competitive 5g towers serving the same geography. This idea isn’t new, and goes way to back to Adam Smith and the Wealth of Nations. And while it would be dangerous to have infrastructure businesses that are privately owned not to having any competition, if they’re publicly owned, and regulated we can remove problems associated with monopoly operators.

Competing interests & political instability – When things like ‘energy‘ are owned by private firms, their imperative is maximise profits and serve their shareholders, not their customers. At a time when we should be shifting to new forms of infrastructure, privately owned utilities create misaligned incentives in the market place. This will be to our long term detriment in the Australian economy. The NBN is a classic example. At a time when NBN is being rolled out (public), it has to compete with the 5G networks of Telstra (private). If we had a single telecoms infrastructure provider, we’d have a chance to build out a singular, worlds best network. Instead, what we have is a piecemeal financial basket case. We, the tax payers, are the losers.

I  truly believe the leadership crisis we are currently facing in Australia (today and over the past decade), is partially because of the problems of vested interests trying to influence the public policy. We have a population that want to move towards renewable energy, yet factions within political parties are influenced by the coal lobby and short term financial interests. The net result is that leaders can’t make the decisions they need to for a future proof economy and we end up with a dysfunctional government.

The benefits of publicly owned utilities – Crucially, this idea isn’t something which sounds fanciful, but just isn’t possible financially. The investment markets have already priced in the truth of what I’m talking about here – that is, the cost of many infrastructure assets are at all time lows. Telstra has a yield of 7% and new coal fired power plants are literally un-investable. Hence, these infrastructure assets could be taken back into public hands at, or below the cost of capital to acquire them. If we did this, the Government would have the ability to build out what the people actually want, and what the future needs. These renewed Government owned enterprises could serve as future employment training grounds in critical skills arenas and we could re-engage our long lost technical apprenticeship model of employment. And let’s not forget that having infrastructure which is world class would facilitate startups to compete globally. This would benefit both the tax base (remember the Gov has a 30% Joint Venture with every business via tax) and open up export potential. What we learn building this out, could then be built in other countries. (software & hardware)

This program might be something we just need to do for 20 years before going private again. But what is clear that our telecoms are a mess, our energy system is a mess and we need new infrastructure quickly if we want to remain wealthy and relevant.

Just this week I was in Sri Lanka and they already have 5G well underway. Emerging economies are building out tomorrow, while wealthy countries like Australia mess around with yesterday’s technology to keep the rich and influential happy. It’s the great squander of our times. One of the reasons the government won’t serve us in Australia, is that we don’t own the assets the decisions are being made around. Maybe if we took the assets back, they’d have to make sure they run these industries properly or they wont get voted back in.

Radical times, require radical action.

What data and fences have in common

We’ve entered the age of the Data Imperialist. New world powers are taking resources before those handing them over have realised what is happening. Once again, it seems that the future is repeating the past.

Most things we value economically in the modern economy are quite far removed from real needs. We invent new asset classes that are things we don’t really need – unlike food, shelter, medicine and education. Where it gets tricky is when something which was once free, fluid and unencumbered gets claimed by a commercial interest. When it does happen though, the pattern is always the same.

  • Those it gets taken from don’t understand the ‘market value’ of what is being taken
  • It gets taken by using tools the others haven’t got.

Into this category we can put land, gold, oil and now we can add data.

Think back to when imperialists sailed to far off lands to plunder the resources from traditional owners. They put fences around things. A fence to someone who’d never seen one would seem like a very strange idea. The mere concept of anyone actually owning land unheard of in many cultures. There’s no value in a fence because no one can own the land! But of course, those who trespassed or tried to access the now fenced off resource were met with gunpowder – a tool the victims didn’t have access to, let alone grasp its power at first.

Online privacy and security are a lot like this. We’ve literally allowed the data imperialists to put a data fence around our lives. While we have known for a long time that knowledge is power, few people in the past 20 years have truly understood how much information we’re really handing over, and the many ways it can be leveraged economically. They, like the conquistadors before them, took it from us before we realised and they too did it with tools we didn’t understand.

Their favourite hack – hiding the truth in 20,000 word long legalese designed to obfuscate. Oh, and they offered us the sugar hit of emotional candy along the way so we could all ‘connect’ on-line – as if that wasn’t already possible with the old school internet. They’ve successfully stooged us out of the most important resource in the emerging economy – data. Henry Ford and his factory friends pulled the same trick on us 100+ years ago when he convinced us to trade in our artisanal skills and independence for highly paid piece labour. Privacy and security are the workplace health and safety of the digital era. The data wars are only just starting and we’ve got to fight back. But how?

Here’s a few ideas to get us started:

  1. Remember everything digital is traceable and on file, forever. There is no anonymity. Never put anything online you wouldn’t want on the front page of a newspaper.
  2. Don’t be platform lazy. Yeah, I know it’s easier to connect on social media platforms… but go direct when possible. Talk on the phone, get your own email client, text – heck, get some analogue FaceTime happening.
  3. Data is labour. We need to socialise the idea that our data should be our personal copyright. Corporations should be renting from us. We created it, we ought own it and it is an own-able resource – if we will it to be.
  4. We have to put our hands up high on what we won’t accept. Data breaches are unacceptable and we should punish platforms with serious consequences – and make sure it’s as unacceptable as pollution and unsafe work practices.
  5. We need to push our Governments to embrace blockchain technology and crypto-economics to enable valued, yet safe, use of data. We need to push them to protect us and our data when they have access to it and protect us from corporations who are data deceivers.

Data like any asset can and should be used for good – where the benefits are shared and protected by those whom create it.  And this is why Blockchain is the most important technology of the past 20 years. It makes the above things possible. And let’s never forget this – our Governments are no different to School yards. It’s a popularity contest. They do what gets them voted back in. What this means is that all we have to do is make these ideas popular.

Steve.