Tag Archives: economics

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Further corrosive effects of networked handheld computing

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Thanks to recent events, it’s almost banal to talk about how the increasing ubiquity of  mobile devices and internet connectivity empowers the average Josephine on the street, but it’s worth remembering that governments aren’t the only hierarchies feeling the burn: the giants of retail commerce are starting to see the playing field flattened by price comparison apps [via MetaFilter].

Until recently, retailers could reasonably assume that if they just lured shoppers to stores with enticing specials, the customers could be coaxed into buying more profitable stuff, too.

Now, marketers must contend with shoppers who can use their smartphones inside stores to check whether the specials are really so special, and if the rest of the merchandise is reasonably priced.

“The retailer’s advantage has been eroded,” says Greg Girard of consultancy IDC Retail Insights, which recently found that roughly 45% of customers with smartphones had used them to perform due diligence on a store’s prices. “The four walls of the store have become porous.”

Some of the most vulnerable merchants: sellers of branded, big-ticket items like electronics and appliances, which often prompt buyers to comparison shop. Best Buy, the nation’s largest electronics chain, said Tuesday that it may lose market share this year, a downward trend that some analysts are attributing in part to pressure from price comparison apps.

The WSJ points out that not everyone has a smartphone capable of doing this sort of on-the-spot comparison, and that it tends to be applied to “big ticket” tech items rather than everyday bits and bobs like groceries. But if we assume that market penetration of handheld tech and mobile internet continues at its current pace, it’s not a wild leap to assume that price comparison will become a standard function, and possibly even the “killer app” that makes mobile internet appealing to those currently uninterested in its more abstract bleeding-edge “social” uses. If the Western recession continues for a few years, tools that save money will become extremely popular, and as a result we may see market forces narrowing traditionally huge profit margins very quickly indeed.

But hey, it’s not all about man-versus-The-Man: ubicomp also lets you single out your fellow citizens for their transgressions against the public good.

DriveMeCrazy, developed by Shazam co-founder Philip Inghelbrecht, is a voice-activated app that encourages drivers to report bad behavior by reciting the offender’s license plate into a smartphone. The poor sap gets “flagged” and receives a virtual “ticket,” which may not sound like much until you realize all the information — along with date, time and location of the “offense” — is sent to the DMV and insurance companies.

Anyone can write a ticket, even pedestrians and cyclists. No one is safe from being tattled on. Even if you don’t use the program, which went live Wednesday, you can’t opt out of being flagged if someone thinks you’re driving like a schmuck. Inghelbrecht is emphatic in saying he sees no privacy issues with the app and insists the end of road-going anonymity can only improve safety.

Now there’s a delightful conundrum for modern morality: we’d all love to be able to shop that douchebag who cut us up while clocking ninety in the fast lane, but we’d hate to be stung for the two minutes we left the car in a no parking zone so we could pop into the post office on our lunch break. The ability to mutually police each other’s behaviour represents a potentially massive shift in the way we think about society… but it also opens the gates to new forms of non-hierarchical persecution, pettiness and holier-than-thou bullshit.

For example, how about an app for reporting non-Christian (or non-Muslim, non-atheist, non-Liberal or non-Conservative) behaviour to a localised public forum? That’s sure to end well! Or an app for reporting people who throw pets into bins for a giggle, perhaps…

It’s a cliché to point out how much power the networked society offers us as individuals. But it’s less of a cliché, I think, to point out that we’re going to have to learn fast about the responsibility of individual and community power – not to mention a new need for mutual tolerance in a transparent world – if we want to avoid descending into a world even more dog-eat-dog than the one technology offers us an escape from. “Look first to the beam in one’s own eye”, and all that.

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No recession in the metaverse, either

A sweeping statement, perhaps, but still: having already established that the “global recession” isn’t actually global, there are signs that some things are still selling hard and fast here in the West. The weird bit? One of those things is access to a hyperreal virtual universe. I’m talking, of course, about World Of Warcraft; I’ll let Edward Castronova sum it up in a few sentences.

Blizzard’s Cataclysm broke a single-day sales record for PC games: 3.3m copies in a day. At $40 each, that’s $132m revenue in a day.

The weekend box office for the latest Narnia move this past weekend was $24m. The other fantasy releases like Tangled and Harry Potter, came to $24m in their second or third week.

OK, granted, WoW was an international release, and those box office figures are (I presume) US-only. But even so, the entertainments that we value sufficiently to pay money for are changing, and changing fast… and no matter how much “can’t live without it” rhetoric you might hear from its regular users, I’m pretty sure no economist in their right mind would describe WoW as anything other than a leisure luxury.

And hey – looks like Blizzard’s managing to make a pretty dime in a piracy-riddled digital world, too. How’d you like them apples, Hollywood?

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The global recession that isn’t

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You can’t turn a page or click a tab here in the UK without reading about the ongoing woes of the global recession, and I rather suspect the situation is similar for Stateside readers.

Thing is, the global recession isn’t quite so global as it looks from our standpoint in the “developed” West; via Tobias Buckell, here’s a piece at Foreign Policy that paints the nations of Africa as a golden investment opportunity – a far cry from the war-scarred deserts and shanty-towns of popular perception.

Africa, in fact, is now one of the world’s fastest-growing economic regions. Between 2000 and 2008, the continent’s collective GDP grew at 4.9 percent per year — twice as fast as in the preceding two decades. By 2008, that put Africa’s economic output at $1.6 trillion, roughly on par with Russia and Brazil. Africa was one of only two regions — Asia being the other — where GDP rose during 2009’s global recession. And revenues from natural resources, the old foundation of Africa’s economy, directly accounted for just 24 percent of growth during the last decade; the rest came from other booming sectors, such as finance, retail, agriculture, and telecommunications. Not every country in Africa is resource rich, yet GDP growth accelerated almost everywhere.

Toby goes on to do some back-of-the-envelope maths:

The world population is estimated to be 6.7 Billion.

Asia and India, both currently in growth patterns, represent 60% of the world’s population. Africa represents 15%. So 75% of the world is actually right now currently growing.

However most of Western Europe, parts of North America, and parts of South America are not. So it’s a global lack of growth for 25% of the world’s population.

There’s no denying that things are looking pretty grim economically for us Euros and Yanks, and that our problems are having a knock-on effect elsewhere. But rather than a global recession, perhaps what we’re seeing is simply a globe that doesn’t spin around us as the pivot point any more. Cold comfort for the myopic, I suppose, but I’m kind of relieved; we’ve had our time in the sun, but the sun hasn’t stopped shining just yet.

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Aliens among us: Charlie Stross on the corporate invasion

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More challenging ideas from Chateau Stross (or should that be Schloss Stross?) – he’s not the first to frame the corporation as a non-human entity with an alarming degree of power and control over human affairs, but – given the current economic and political climate – it’s a conversation worth revisiting.

We are now living in a global state that has been structured for the benefit of non-human entities with non-human goals. They have enormous media reach, which they use to distract attention from threats to their own survival. They also have an enormous ability to support litigation against public participation, except in the very limited circumstances where such action is forbidden. Individual atomized humans are thus either co-opted by these entities (you can live very nicely as a CEO or a politician, as long as you don’t bite the feeding hand) or steamrollered if they try to resist.

In short, we are living in the aftermath of an alien invasion.

The comment thread is fantastic reading too, but very long; set aside an hour or so to really dig into it properly.

Here’s a counterpoint from the NYT‘s Paul Krugman:

These days, we’re living in the world of the imperial, very self-interested individual; the man in the gray flannel suit has been replaced by the man in the very expensive Armani suit. Look at the protagonists in the global financial meltdown, and you won’t see faceless corporations subverting individual will; you’ll see avaricious individuals exploiting corporate forms to enrich themselves, often bringing the corporations down in the process. Lehman, AIG, Anglo-Irish, etc. were not cases of immortal hive-minds at work; they were cases of kleptocrats run wild.

And when it comes to the subversion of the political process — yes, there are faceless corporations in the mix, but the really dastardly players have names and large individual fortunes; Koch brothers, anyone?

I find myself somewhat on the fence here, principally because I’m painfully aware that I know enough about economics to know that I don’t know enough about economics. I’m not sure that the corporation as a concept is inherently bad, but I’m very sure that the current protectionist set-up is a root cause of many of our current problems, at both the global and local scales.

What do you think?

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SpaceX Dragon capsule: breaking a trail to a new economic frontier?

You’d have had to be living under that oft-mentioned internet-proof rock (or possibly just focussing on that other currently ubiquitous news topic) to not have noticed that yesterday’s launch and re-entry of SpaceX’s Dragon capsule went off exactly according to plan. So when – if? – the Wikiwars die down a bit, expect a lot of pondering from all sides about the future of commercial space exploration, unfettered (well, kind of… or rather not really) by the capricious politics and budgeting of nation-states. Hell knows I’ll be waffling about it a fair bit… but then you probably knew that already.

The sceptical among you may be wondering what’s going to convince profit-motivated businesses to clamber up the gravity well. Well, Centauri Dreams has a pretty good run-through of a paper entitled “Space Colonization: A Study of Supply and Demand”, which suggests that there may well be gold platinum in them thar lunar hills…

Lunar prospecting, then, is a first step in determining the existence of asteroidal metal containing nickel, cobalt and platinum-group metals on the surface. We have much to learn, including not just the quality and location of ores, but also the location of volatiles like water. We also need to learn what happens when asteroidal nickel/iron is made into metal products, and to what extent we will have to rely on engineered alloys to get the desired result. At present, of course, we cannot test the processes we might use on the lunar surface, requiring a preliminary manned base there to work through these contingencies.

Andrews works out a simple cost model exploring mining, processing and shipping operations, comparing these to existing costs. With platinum, for example, selling at close to $40,000 per kilogram, a price that is itself escalating, the case for lunar mining is clearer than that for more plentiful products like cobalt.

How will the mining be accomplished? That’s left for someone else to write a paper about… but how we might get there and back again gets a look-in.

Andrews proposes a lunar sling for launching metal products to Earth, but goes into greater detail on what any space infrastructure requires going out of the gate: A simple and inexpensive way to get to Earth orbit, what he calls FRETOS — Fully Reusable Earth-to-Orbit Systems. A fleet of five launchers supporting a flight rate of 1000 launches per year using four tethers is at the heart of the proposal. On the space side, a Skyhook capture device located at 300 kilometers orbital altitude is part of a picture that also includes a Low Earth Orbit station at 1000 kilometers, a powered winch module at 1700 kilometers and a counter-balance at 2400 kilometers. The total mass of the space segment is estimated at 190 metric tons, including 2100 kilometers of tether lines, high-speed winches, power generation arrays, counter balances and station-keeping components, all to be launched separately and docked together for assembly.

All hypothetical at this point, of course, but the space where possible and plausible overlap is a nice place to hang out… that’s why I read science fiction, at any rate. 🙂