Australia’s Crucial Turning Point

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Editor’s Note: Port Phillip Publishing is taking a short break for the holidays. We will be returning to our posts on 4 January, 2016. While our editors enjoy a few days off with friends and family, we thought you may enjoy reading some of their vintage pieces from 2015. You’ll see the date that these articles were originally published up top. Facts and figures have not been updated. Happy holidays.

This is an edited extract of an article first published on 13 November 2015 in Port Phillip Insider.

Australia’s Crucial Turning Point

The future, packed with all of its marvels and flops, promises and dangers, is coming. And it’s coming far faster than many can fathom. If you get most of your news from mainstream media, you might be surprised at just how fast technology is set to disrupt almost every facet of our lives.

Noah Smith, writing in Business Day, is certainly in for an eye-opener. Here’s what he writes about the rise of the robots and their impact on the labour market:

‘…there is little evidence that capital labour substitutability — the economic term for employers’ ability to replace humans with machines — is increasing… It isn’t happening today; but it’s something that might take place 50, 75 or 100 years from now.

Well there you have it. Big sigh of relief. Your job, and your kids’ jobs are safe from the disruptive impact of robots. My two year old daughter won’t have to concern herself with this matter for another century!

Of course, when I mentioned my sense of relief to our resident tech guru Sam Volkering, he had trouble containing himself. Sam is based in London, so we generally speak on Skype. (Yup, that’s a video call, free, worldwide, and mobile…Bet there were a lot of people who once thought that might take another century to come about too.)

50 years?!’ His reply was loud enough to distort my computer’s speakers. Loud enough that I decided not to mention the 100 year figure. Rather than rant on, Sam sent me a link to a recent update he wrote to subscribers of his premium investment service, Revolutionary Tech Investor.

Aside from detailing some of the best investable tech companies  in the update, Sam talks about a book called The Second Machine Age, co-authored by Andrew McAfee. Here’s an excerpt from that update:

McAfee explains that most people comprehend progression in a linear manner. For example going from 10 to 20 to 30 to 40. That’s a smooth, logical, incremental progression. But that’s not how technology advances. It’s not linear at all.

What’s harder for people to comprehend is exponential progress. Going from 10 to 20 to 60 to 240 to 960 is a lot more difficult to get your head around. But that’s exactly how technology advances. With every step forward the next step comes faster.

Source: Robotswillstealyourjob.com

[click to open in new window]

Right now we’re roughly in the region of the ‘Knee of Curve’ in the diagram above. For the bulk of the 20th century we had linear progression, Moore’s Law demonstrates that. But now we’re accelerating dramatically. Since the turn of the century things have been getting faster and faster.

We’re now talking about self-driving cars, 3D printing and an “Internet of Things” as though they’re common terminology. 15 years ago this was merely a pipe dream.

With all due respect to Noah Smith — I’ll let you decide how much is due — I’m with Sam on this one. If you’re like me you remember the old rotary phone. The one that was fixed to the wall, where the number one dialled quite quickly but the number zero had to go all the way around the circle. And if you were calling overseas you’d go through an operator. Not a computer generated voice mind you, but a real person working a switchboard.

And let’s not get started on typewriters, carbon copies, or the Dewey Decimal card filing system at your local library. I never did entirely figure that one out.

The point is that things have changed dramatically over the past 30 plus years, and looking at the graph above, the pace of change is set to heat up…fast.

Now that can be mostly good for Australia…or mostly bad. The decision is ours. But we need to decide carefully. Because if history is anything to go by, once these decision are made they are very hard to unmake.

Just say no

Though I tend to run five years behind the curve with the latest tech gadgets, I do very much appreciate the brilliant advances technology brings to our lives. But we need to be very cautious in how we implement this technology. Specifically, how we allow government, corporations, and our neighbours to implement it.

Running through November’s news there are no less than four new tech related developments you must — in my most humble opinion — say no to.

First just say no to this, from the Sydney Morning Herald:

Australia’s peak road safety body has called for alcohol interlocks to be fitted to every vehicle in Australia, requiring all drivers to sit a breath test each time they turn the ignition… The aggressive strategy for tackling alcohol-related road deaths and injuries has been put forward by AustRoads…

The universal application of interlocks will ultimately save many lives, the report argues. The cost of installing and calibrating the devices would be borne by vehicle owners…

Cameras that capture the moment an interlock is blown into have been fitted to new interlocks since January 1, and the report predicts fingerprint recognition, real-time reporting of violations and GPS tracking are all imminent innovations.

More than 5500 people were surveyed for the report, which found… middling support for a universal scheme – 48.6 per cent supported interlocks for “all drivers, all vehicles” and 51.6 per cent were against this.’

To be clear, driving under the influence of alcohol is a dangerous, foolish decision and rightfully illegal. But the biggest problem with this scheme is that it assumes you’re guilty and makes you prove your innocence every time you want to go for a spin. Not to mention you’ll bear the cost. Or that you’ll have a camera placed in your car beside the fingerprint monitor. And you’ll be tracked, like it or not, by GPS.

The most frightening statistic in this article is that only 51.6% of the survey group came out against it. 48.6% are already on board — well before any government led scare campaign to win them over.

Second just say no to this, from Business Insider:

Facebook is testing a new feature to make it easier to share your photos with friends — before you even upload them to the social network.

Using facial recognition, Facebook Messenger will look through your newly taken photos in your phone’s camera roll to identify your friends in them.

Facebook isn’t doing this without your permission, but you may not have realised you’ve given them permission to begin with… If you’ve ever sent your friends a photo via Messenger, you’ve likely already opted in.’

I think this one speaks for itself. Somewhere Orwell is turning over in his grave, muttering, ‘No…’

Third (and fourth) just say no to this from Business Day:

You’re being watched. Your breathing, heartbeats, the hours that you sleep and wake are being monitored by an Intel-built smart watch on your wrist.

And if you’re proven healthy… you could save hundreds of dollars in insurance premiums each year.

That is the proposition by life insurance giant MLC, which has become Australia’s first insurer to use smart watch technology to track customer’s habits…

The federal government has opened the door to companies offering different health insurance premiums to customers based on their personal risk factors.

Tracking devices are not uncommon in the general insurance sector, particularly in the motor vehicle insurance market… Companies such as QBE Insurance Group are now offering telematics-based policies that involved installing a black box in a customer’s car to track how they drive.

That’s two things to say no to. No black box in the car please. Not now. Not ever.

As far as the smartwatch goes, since when are doctors so inept they can’t judge your health by the good old fashioned methods. You know, scale, blood pressure, blood tests, turn your head and cough…

A freaking smartwatch to track my sleeping, eating, and exercise patterns to determine my health insurance premiums? Really? I imagine your insurance agent would be privy to your love life as well. ‘Hey, heart rate was up for 12 minutes last night before bed. Good on ya mate!’

NO!

Sam Volkering’s take

You won’t be surprised that I decided to shoot all of this past Sam. He spends so much of his time explaining the benefits of new technologies — and how you can profit from the companies developing them  — that I had to get his angle.

Here’s what he wrote back to me:

We’re at a pretty crucial point when it comes to our “lives” in the digital world. The big question that needs an answer is who owns the data? Is it me? Is it Facebook? Is it the government? Everyone is trying to stake a claim on our data. The way I see it is I own my data. End of story. Whether I create that data on Facebook, Google or through a smartwatch, FitBit or my phone it’s mine. And I should choose who gets it and when they get it. And they should reward me for it.

It doesn’t have to be monetary but I should get something for my data. Maybe people are just happy with the reward of a more streamlined life (although I doubt it long term).

Until the powers that be recognise we own our data we’re going to face some serious issues around privacy and spying. I think there could even be a mass revolt away from more modern, data driven tech back to tech that isn’t as forthright with sharing our data without some kind of permission and reward. Think of it like a big tech holding pattern where — at least consumer tech — doesn’t really advance. That would be a shame but it’s a real possibility. 

I personally think it should be a human right to own our data. Much in the same way the internet should be classified as a fundamental utility like electricity and water. But unless our government and major corporations realise this we’re in for some interesting times ahead.’

Interesting times ahead indeed.

By the way, if you’re interested in finding out more about Sam’s work and the companies he recommends in Revolutionary Tech Insider, you can do so here.

Regards,

Bernd Struben

Managing Editor, The Daily Reckoning

Join The Daily Reckoning on Google+

Bernd Struben

Bernd Struben

Bernd Struben is the Managing Editor of Port Phillip Publishing. Bernd has worked on four different continents, and has more than 20 years of professional finance, editorial, and management experience. He holds a degree in economics.
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