Google have treied lots of products but really only succeeded with search and the advertising wrapped around it. We all use that search functionality to find stuff out, and it works.
Well sort of. There is a lot of junk out there that needs filtering out.
Along comes facebook.
Theoretically Facebook could create a whole new private global network. A nice captive audience for their wares.
Would Facebook stop us using Google? Well they could embed some new search functionality into what they do but probably not. What they might do though is change how we source information. For example when looking for your online christmas presents surely you would trust a recommendation from your Facebook network of friends or extended friends rather than the anonymous companies that come up in Google? Essentially Facebook-Search could become some sort of self filtering social-netowrk driven search.
thena gain I've had a facebook account for a few years but never really used it as my demographic all have accounts but don't really use them.
Thursday, 6 January 2011
Friday, 10 October 2008
Where will the global economy be in 10-15 years
It's all doom and gloom at the moment. Surely in 10-15 years time it will all be fine.
Will it?
Look at the lost decade in Japan. Zero interest rates but still no growth during the 1990s.
We could be in for a similar scenario.
However I have doubts that the situation will be the same for the West - it might be worse.
What do you think has driven the global economy over the last 20 years. What single thing? The single European market? Growth of the Asian markets? Increased affluence in the West? Post Cold War benefits? I'd argue that of course these are all important but there is one thing even more important.
Think back further. What changed the world economy during the 1800s and early 1900s? Clearly the Industrial Revolution. Essentially a massive increase in productivity by replacing humans with machines.
Recently we have seen UK and US companies increase productivity by outsourcing to China and India. That will probably continue but what is driving that outsourcing is cheaper wages not the need to use less humans. So that can only continue until Indian and Chinese wages rise to a level where it no longer becomes sensible to outsource any more. Perhaps 10 years away?
What I would argue HAS driven the West is increased productivity due to the silicon chip. Costs have been significantly lowered by machines being very much cheaper than people. Computerisation has replaced business processes and created new markets and given new insights into business. All making more money for companies everywhere.
Computer chips have got smaller and faster. They will continue to get smaller and faster. But so what? Is your home PC really that much faster than the one you had 3 years ago. In reality it is not - despite the marketing hype. Of course there will also continue to be new technological innovations that use computer chips but is someone going to invent something even better than a mobile phone; and even then, again, so what? Mobile phones alone won't continue to let our economies grow at 2%pa. Look at SAP (an accounting software company) they have been focussing on mid-size companies and selling value added add-ons to their other existing clients - their core market that caused their phoenomenal growth is saturated. Is someone going to invent a whole new way of accounting? I think not.
How about a new internet? The internet is probably the final growth large phase available to Western firms. Essentially it is still computers that underly this cheaper and perhaps sometimes more effective business process medium.
A new google or a new facebook may well come along but that will just give a new channel to market for the marketeers. It won't create millions of jobs and extra percentage points of GDP.
Green issues. That all boils down to saving energy and switching from finite oil reserves.
So where will the economy be in 15 years time?
Let's hope someone invents working Nuclear Fusion. Limitless, safe and inexpensive energy now that could make a difference. Then we could go mining on Mars (currently quite expensive).
Maybe nanotechnology could produce a step change in productivity improvement.
China will have caught up. There will have been some new and unexpected innovations using variations on existing technologies. But the next BIG thing will probably not have come along. UK and US comapnies will have to innovate broadly within the current innovative frameworks and exploit the new developing markets of the East and new incremental technologies.
Will it?
Look at the lost decade in Japan. Zero interest rates but still no growth during the 1990s.
We could be in for a similar scenario.
However I have doubts that the situation will be the same for the West - it might be worse.
What do you think has driven the global economy over the last 20 years. What single thing? The single European market? Growth of the Asian markets? Increased affluence in the West? Post Cold War benefits? I'd argue that of course these are all important but there is one thing even more important.
Think back further. What changed the world economy during the 1800s and early 1900s? Clearly the Industrial Revolution. Essentially a massive increase in productivity by replacing humans with machines.
Recently we have seen UK and US companies increase productivity by outsourcing to China and India. That will probably continue but what is driving that outsourcing is cheaper wages not the need to use less humans. So that can only continue until Indian and Chinese wages rise to a level where it no longer becomes sensible to outsource any more. Perhaps 10 years away?
What I would argue HAS driven the West is increased productivity due to the silicon chip. Costs have been significantly lowered by machines being very much cheaper than people. Computerisation has replaced business processes and created new markets and given new insights into business. All making more money for companies everywhere.
Computer chips have got smaller and faster. They will continue to get smaller and faster. But so what? Is your home PC really that much faster than the one you had 3 years ago. In reality it is not - despite the marketing hype. Of course there will also continue to be new technological innovations that use computer chips but is someone going to invent something even better than a mobile phone; and even then, again, so what? Mobile phones alone won't continue to let our economies grow at 2%pa. Look at SAP (an accounting software company) they have been focussing on mid-size companies and selling value added add-ons to their other existing clients - their core market that caused their phoenomenal growth is saturated. Is someone going to invent a whole new way of accounting? I think not.
How about a new internet? The internet is probably the final growth large phase available to Western firms. Essentially it is still computers that underly this cheaper and perhaps sometimes more effective business process medium.
A new google or a new facebook may well come along but that will just give a new channel to market for the marketeers. It won't create millions of jobs and extra percentage points of GDP.
Green issues. That all boils down to saving energy and switching from finite oil reserves.
So where will the economy be in 15 years time?
Let's hope someone invents working Nuclear Fusion. Limitless, safe and inexpensive energy now that could make a difference. Then we could go mining on Mars (currently quite expensive).
Maybe nanotechnology could produce a step change in productivity improvement.
China will have caught up. There will have been some new and unexpected innovations using variations on existing technologies. But the next BIG thing will probably not have come along. UK and US comapnies will have to innovate broadly within the current innovative frameworks and exploit the new developing markets of the East and new incremental technologies.
Musings on getting out of recession
People are asking if the current concerted actions by the global financial authorities will work. They are forgetting to also ask what they are meant to be working for.
Current actions are to stop a complete meltdown of lending and hence the stopping the end of the capitalist economy as we know it. The actions are NOT to stop a recession per se. There will be, and probably is already, a global recession. (We won't know for certain because there is a lag in publishing of quarterly growth statistics).
So "How deep will the recession be?" is a better question.
Deep. Would be the most simple and obvious answer.
We are now living in a much more complex and interlinked global economy than was the case during the crash of 1987. And indeed the FTSE itself is a different beast as London has become more pre-eminent the FTSE is less of an indicator of the UK economy having, for example, many financial institutions and firms from primary industries as its constituents.
Despite that complexity I wouldn't mind betting that recovery will be linked to the valuations in the housing market. It's a safe bet that the UK and US housing markets have not yet bottomed out. Valuations in those markets were inflated by dodgy lending (hence the mess we are in - as we all know). However the bubble must fully deflate to more realistic levels of housing valuations and then be depressed further because of lack of demand being caused by recessionary factors in play at that time. Essentially when house affordability (measured by comparing average house prices and average household incomes) hits about 1998 levels, think about getting back onto the housing market roller coaster.
The US and USA will suffer most as we have made the silliest loans possible for silly people to take up. These economies will recover slower than other European markets and of course slower than Asian markets.
Current actions are to stop a complete meltdown of lending and hence the stopping the end of the capitalist economy as we know it. The actions are NOT to stop a recession per se. There will be, and probably is already, a global recession. (We won't know for certain because there is a lag in publishing of quarterly growth statistics).
So "How deep will the recession be?" is a better question.
Deep. Would be the most simple and obvious answer.
We are now living in a much more complex and interlinked global economy than was the case during the crash of 1987. And indeed the FTSE itself is a different beast as London has become more pre-eminent the FTSE is less of an indicator of the UK economy having, for example, many financial institutions and firms from primary industries as its constituents.
Despite that complexity I wouldn't mind betting that recovery will be linked to the valuations in the housing market. It's a safe bet that the UK and US housing markets have not yet bottomed out. Valuations in those markets were inflated by dodgy lending (hence the mess we are in - as we all know). However the bubble must fully deflate to more realistic levels of housing valuations and then be depressed further because of lack of demand being caused by recessionary factors in play at that time. Essentially when house affordability (measured by comparing average house prices and average household incomes) hits about 1998 levels, think about getting back onto the housing market roller coaster.
The US and USA will suffer most as we have made the silliest loans possible for silly people to take up. These economies will recover slower than other European markets and of course slower than Asian markets.
Thursday, 9 October 2008
Musings on the way ahead
Global panic, financial meltdown. I'd like to take some time to explore a few of the current issues and where it might all be heading. Whilst I'm a pessimist at heart I can still take heart in sometimes looking back and seeing I was wrong.
However as we stand in October 2008 I have to say, financially speaking, I told you so - about 3 years ago. Whether it could have been called irrational exuberance or something else, we are where we are. And we got here because idiots borrowed more than they could afford from greedy idiots who were regulated by ineffective dullards who just didn't understand what the rocket scientists were continually coming up with and the impact of their actions on our lives.
However as we stand in October 2008 I have to say, financially speaking, I told you so - about 3 years ago. Whether it could have been called irrational exuberance or something else, we are where we are. And we got here because idiots borrowed more than they could afford from greedy idiots who were regulated by ineffective dullards who just didn't understand what the rocket scientists were continually coming up with and the impact of their actions on our lives.
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