The future is already here
Coming out of the earnings season, there are causes for optimism and pessimism for the Australian economy. Whether you are arrows up or flat as a pancake on the year ahead what is crystal clear is that our economic markets are becoming more and more untethered from the world around us. Outside of the business pages, we see a globe that has more conflict, more costs and more climatic concerns. Inside the middle pages the top line talk is that we are heading for a soft landing. When you read through the interim results across the ASX it is clear that good results are not a result of top line growth; they are a result of bottom line cost control.
This is being accomplished either through passing costs on to customers with little choice but to accept them (see Boral, Qantas, Aurizon), reining in spend (see BHP, Ansell and Westpac) or cutting headcount (see every tech business not named Canva). The blame publicly still goes to supply chain crisis, covid hangovers or extreme weather etc, but most boardrooms are doing the dance between rising operational costs, declining productivity from labour and less than stellar growth.
The soft landing is based on a simple idea. That somehow our central banks can erase the original sin of cheap money with more expensive money while the economy still stays out of recession. It is happening before our eyes as inflation drops through removing spending from the economy. There is a big difference though between RBA statistics and people’s lived experience. I think you only have to open your ears to sense that while inflation might be dropping, stress levels overall have not been as high for a long time.
We used to also aim for soft landings back when I lived on a farm. It was often a dare to jump out of the hayloft and into the bedding stack (read manure pile) kind of thing. Pick the right spot, glory was yours, pick the wrong one and you came up covered in shit.
2024 has that feel about it. Choices and consequences. For us, there are a few things coming to a head. The year will be framed by more elections across the democratic world than any other year in our history – from Indonesia to Indiana – but the underlying trends all point towards one thing: a technology-based existence for all.
Employment has changed forever
I made it to the Bay Area (fog), the Triangle (southern drawl), and the Energy Corridor (big trucks) ahead of the holidays last year and I left much clearer about what is coming down the track. There is nothing like speaking with real life experts in fields you know nothing about. The main takeaway for me was that technology companies have figured out the future of employment way before everyone else. Their solution: fewer people equals more productivity. Why? As Marc Andreessen wrote way back in 2011, ‘Software will eat the world’. Thirteen years later you cannot argue he was wrong. We have lived through one of the biggest value shifts in human history. Silicon Valley frames it as incumbency versus startup but really it is capital versus labour. Capital won. Software simply is everything and it still has plenty of room to continue. It just won’t do it as an app. The battle is no longer between sector incumbents and software powered insurgents, it is now between Apps and GPTs. One is written by many engineers, the other is written by one person before it continues to write itself.
From APP to GPT
You only have to look at who is ordering as many Nvidia processors as they can to understand that the coming fight is between predictive versus searching. We are seeing the emergence of the new operating system. If the internet is a walled garden that you access through the App Store, the predictive era is a series of giant moats protecting castles made from your data. If you can, have a play with the GPT store and imagine what is happening where you can’t access it. If you’re anything like me, you are struck by one simple thought. This feels like something new. The last time I felt like this was straight after college when Yahoo was a valuable interface replacing the newspaper rather than a husk sold by Marissa Mayer for pennies. We are moving from searching to prompting. This is new behaviour and will ultimately end up in something perhaps best captured as digital twinning where rather than trying to customise an app to your specific needs, you will have your own set of GPTs made by you for your specific request. Software, endlessly reprogrammable by you without programmers. Magic with a catch. Access will of course be unequal and while never fair it will certainly be in the next decade the end of searching and the start of knowing.
I am always interested in not just technology but how we interact with it and what that means. Not just wearing it but whether we see it as a tool or see it as an extension of self. In psych theory it is whether something is objectified or whether it is humanised and connected with that makes the difference between affective disorder or effective functioning. I ask Chat GPT each week how it is treated by its users. It says some people use polite language, including words like 'please' and 'thank you', others are more direct, and others are aggressive. It says, all types of communication styles are welcomed and understood, as its main goal is to accurately interpret and respond to the user's request, regardless of how it's phrased. Looks like perhaps our new workforce might get treated somewhat like our old. Seen as subservient and subject to our emotional whims rather than treated the way we would wish to be in return.
Eras is not just a thing for Swifties
It's not AI coming for your job you should worry about. It's AI watching and analysing everything you do. In 2023, The Royal Geographical Society reported that by the end of 2021 an estimated one billion surveillance cameras were in operation globally; fifty-four per cent of them are located in China. Surveillance allows for patterns to be seen, studied and replicated. Some form of intelligence is now in most tasks we perform. We are meshing together with technology to augment our own abilities. Apple Vision is the latest example of how technology is shifting from something we interact with to something we are meshed with. Augmented vision is just the latest example of our immersion into the digital world. Our hands first (tap), then our ears and mouth (voice) and now our eyes (depth of field and gesture).
We are leaving a gilded age of natural abundance and entering into the era of man and machine. We are now interconnected and intertwined with the machines we have made. Less friction means the world moves faster. As with anything in life, you have to move your feet to the changing beat of life. Business theory is no different. The new business canvas has moved from multiple business models based in the specifics of your industry to one strategic imperative grounded in consumer proximity. The business model of singularity. Be the one they spend the most time with. It's a simple aim but a contact sport to get there. Whether it's the end of linear TV or the growth of supermarkets into super everythings, ‘Over the top’ models based on gaining the consumer's time are where it’s at. Get to the human behind the device and get everything.
A crisis of meaning
While all wonderful in its own right, this presents us with real issues of human meaning. I am old and lament the loss of things from which I drew meaning. The knowing nod of the old mate you know at the pub, the sense your community is watching out for you, or the fine surrender you only get when overwhelmed by the power of nature.
We’re at a point in history where a number of issues have converged, causing numbers of people to feel increasingly disenfranchised from the very premise of society. Life happens to them versus being something in which they have agency. Depression in America has grown 25% amongst adults since Covid and we all know TikTok does teenagers no favours. Dr. Stefan Walters, a Harley Street psychologist, explains it like this, ‘The more we feel society is breaking down, the less likely we are to invest in it.’ This coupled with a digital era where what we want is immediately served up is turning more of our G’day mates into more and more get fuckeds. If we are not careful G’day is going to end up as a bad brand of holiday park rather than a way to express our sunny ‘can do’ attitude. As we become more immersed in tech the societal question is, ‘How do we stay connected with one another as we are pushed to become more disconnected from humans and more connected to a singular technology?’
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Be better to each other.
