Society & culture

Laptops before breakfast

According to The Bercow report, a 2008 UK government report on the speech, language and communication needs of children, our addiction to technology could lead to a fragmentation of family life and damage the way our society works. If you can find a house with more than one occupant, chances are each individual will be in a room on their own clicking or bashing away at something connected to a screen. And that’s before anyone even gets out of bed.

In many households, the first and last action of each day nowadays is to check for email messages, texts and Facebook updates. Moreover, an increasing number of face-to-face encounters and communications are made online, even in individual households, either because that’s where younger people now live or because it’s seen as quick and easy. For example, rather than telling someone in person that it’s time to have breakfast or get out of the bath, more parents are sending messages, requests and communications via message boards, phones and computers.

The more accessible and affordable digital devices become, the less we have to do with each other. This ‘digital isolation’ trend is well documented. For example, a PEW Internet study in the US has found people who use social networks are 30% less likely to know their own neighbours. However, the same trend applies to families and, the more family members are allowed to put themselves first and live in personalised bubbles, the more they will tend do so.

We are in grave danger of losing deep and empathetic understanding of real needs and wants. Second, we are in danger of losing many subtle signals, such as body language. Third, we are at risk of breeding a young generation that is lazy, self-absorbed, narcissistic and rude. But then, what young generation isn’t?

The lost boys

I’m not sure whether this is a purely UK phenomenon but it appears that, in Britain, society has created a lost generation of dissatisfied, disengaged and disaffected young men. Perhaps through parent neglect or stupidity, or external pressure from the media, government and other institutions, we have bred a group with misplaced ambition and no motivation.

Asked by pollsters what hopes they had for the future, 11% of 16-19 year olds in one survey answered, “waiting to be discovered” (by a reality TV show). A further 26% thought a well-paid career in sport or entertainment was a good option. Many of these young men seem to believe they are somehow owed a celebrity lifestyle without having to put in any real effort. They have a strong sense of entitlement and this has been indulged until recently by relatively affluent parents (and governments). Sitting around doing next to nothing, waiting to be discovered, has become a career option.

Perhaps young men have simultaneously lost both their sense of fear and their sense of ambition. Global connectivity (Facebook, Twitter et al) has become an accelerant for a kind of fear, which is loss of face. Ten or twenty years ago, individuals could try new things and fail without anyone noticing. Nowadays, loss of face can be instantly amplified by network effects, and the internet will never forget. Best, therefore, to simply keep your head down and do nothing.

Your brain on computers

In 2008, people in the US consumed three times more information than they did in 1960. According to researchers at the University of California (San Diego) Americans now spend, on average, 12 hours per day looking at media. (No wonder we can’t get anything done.) The 12 hours refers to total combined screen time, so if you watch 6 hours of TV with a computer on in the background, that 6 counts as 12 hours.

Regardless of definitions we are spending an extraordinary amount of time looking at screens of one type or another. But this non-stop connectivity and interaction has side effects. First, we are becoming addicted to new information. We feel bored without it. If we leave our phone at home, we feel naked. If our email goes down, we feel we can’t do anything worthwhile and, if we don’t receive updates from our friends, we feel alone.

One consequence of all this frantic activity is loss of concentration. There are just too many things competing for our attention and we are becoming distracted and disturbed as a result. We are becoming better at finding information quickly, but the excess of information (much of it worthless) makes our thinking fractured.

You can argue that the human brain is wired to adapt and all this will sort itself out in the end. But while filtering excessive information may be possible, we may lose deep analysis and originality. Moreover, the more we become connected digitally, the weaker our physical ties may become. If people are in iPod oblivion, personalising information and looking down at screens, the less they will see and engage with family members in the same room or strangers in the street. We will become a society of impulsive individuals where loneliness is a crowded room with no Wi-Fi access or mobile reception.

Electronic insecurity

Is China a military threat to the US? The answer is no, but perhaps only if we think of war in conventional terms. China is growing economically and militarily but China has not been expansionist historically and many scare stories about a military threat have more to do with the Pentagon budget building than reality.

For example, China has a plethora of internal problems and its military power is not as impressive as you might imagine. The US military budget is between 5 and 10 times the size of China’s and the sophistication of US military planning and equipment is still ahead of China in most areas. The US is also more battle ready and has more experience of actual combat. It’s true that China has an ambition to one day be strong enough to take back Taiwan, possibly by force if necessary, but transitioning the economy and creating new jobs, housing and infrastructure is a far higher priority.

While China is a huge country with a massive depth of resources (especially people), as Mike McConnell, a retired US Admiral and former head of the US National Security Agency puts it: “We tend to think of everything about China as being multiplied by 1.3 billion. The Chinese leadership has to think of everything being divided by 1.3 billion.” So if China doesn’t represent a conventional military threat, where is it strong? The answer is cyber-war and digital disruption.

China has more internet users than the US and therefore has a large hacker population. This means lots of potential cyber criminals and tightly coordinated electronic spying, some of which is undoubtedly directed at US military and defence engineering. But it’s not just conventional targets that are at risk. Computer networks are not only used to control military assets but everything from financial services to public utilities and it’s probably only a matter of time before something very big goes wrong. Moreover, with everyday life moving online and living in “the cloud” the implications of cyber attacks (whether government sponsored or not) are enormous.

Everything from money and energy to transport, water and health are at risk. Moreover, China is not the only nation electronically eavesdropping. Russia, Israel, France and Brazil are also well known for using electronic espionage to acquire secrets, for financial or political ends.

So what’s next? The key message is probably that China is less of a threat that people in the West think, even in cyberspace. Again, China’s priority is domestic control and regime survival and anything else is just icing on the cake. Furthermore, it is in China’s interests to accommodate American interests and vice-versa and both nations have a vested interest in developing secure data networks. So, if there is a threat of a 9/11 style cyber-attack, the threat is probably from someone or somewhere we don’t expect.

An overthrow of our assumptions

Are we on the brink of a new age of rage, especially anger at the global plutocracy? The initial reaction to the GFC was disorientation. This was followed by a period of rage directed at a handful of individuals and institutions. Things have calmed down now but there remains a residual level of distrust that could soon mobilise into a kind of populist fury if banker bonuses return to pre-crash levels while everyone else gets squeezed economically.

But bankers are only one part of the story. One consequence of globalisation and technological change is that openness has increased and barriers to entry have fallen. Demand has also risen substantially in many instances. The combined result is that it is now possible to make large sums of money very quickly. But most of the spoils have been accrued by people who are highly educated and internationally minded. For example, only 0.1% of the wealth created in the US between 1990 and 2008 went to households and between 1997 and 2001, the top 1% of US earners received 24% of the growth in aggregate real wages.

And it’s possible that this inequality is about to get worse. Adding in the impacts of automation and outsourcing, the value of unskilled and semi-skilled labour in developed nations could fall even further as taxes are increased and almost everything gets more expensive. For example, inflation in the UK is technically running at around 3% but this figure is misleading. Unofficially the inflation figure is probably closer to 6% and could even be 9% when the real costs of local food, energy and transport are included. Hence the threat of a stagflationary squeeze where the cost of living rises substantially but real wages stand still or evaporate altogether. What’s next? One immediate result would be falling confidence but this could be followed by a decline in social cohesion and an increase in rage.

The radical transparency of the information age

The recent leak of vast amounts of confidential US data about Afghanistan highlights one downside of the information age – privacy is dead. Leaking confidential information is, of course, nothing new. What’s different nowadays is just how easy it has become to steal data and how quickly this data can be distributed. It is the speed, scope and reach that’s changed.

To some extent companies and institutions that keep things secret deserve everything they get and it is in society’s interest to make all decision making public and accountable. This is probably a view held by Wikileaks, the organisation behind the recent digital deluge, but things are never so simple. For example, the leaking of thousands of secret US military documents would almost certainly put a number of individuals at risk in Afghanistan. Is that fair?

Wikileaks itself is interesting for a number of reasons. First, it is an example of open innovation as anyone can submit information. Second, the organisation hosts its data in more than one country, making it difficult for a single government or institution to prevent material from being published or force the website to remove material. However, there are some serious issues here beyond pure secrecy.

To whom is an organisation like Wikileaks accountable and what happens when they get something wrong? Previously it was newspapers that leaked information or exposed wrongdoings but when they got it wrong they could be forced to issue a retraction or be sued.

Takeaways? First, expect the amount of confidential data to grow exponentially but also expect leaks to become more frequent. Second, expect the time that institutions have to react to leaks to shorten considerably. Third, expect a battle between governments imposing more restrictions to prevent data abuse and individuals lobbying for more transparency and access to data that impact their lives.

A very big question

China is now the world’s second largest economy and could take the number one spot around 2030. China has been spending like crazy over the last few decades because it needed to industrialise its rural economy. It has done this on the back of exports of low-cost Chinese labour. But what if one of these factors were to evaporate? What if infrastructure spending slowed down because the infrastructure had been built?

One answer is consumer spending. Reorientate the economy away from exports towards internal consumption. This is happening already and there is still room to grow through urbanisation. However, when labour costs rise substantially, so too does the strength of highly organised labour. Again this is occurring. Only 5 million individuals aged 35-54 will join the core Chinese labour force this decade, compared to more than 90 million during the last. The consequences are more expensive and more militant labour, and sending labour abroad to, say, Africa and South East Asia.

It is well known that the country is in a race to get rich before it gets old and the leadership is well aware of the growth challenges it faces in the years ahead. But a few potential flash points need to be watched. The first is a domestic property boom. Property comprises 30% of all investment spending in China and that’s a worry, although we should not underestimate the power of the government to moderate any market excess.

A bigger worry is an export slowdown caused by a slump in the US or European markets. This could be globally contagious. For example, the booming economies of Australia and Brazil are almost wholly reliant on Chinese demand for resources (China accounts for 30-60% of worldwide demand for most industrial commodities). Even Russia and Venezuela would suffer if China’s economy dipped because China was responsible for almost 50% of extra demand for oil over the last ten years.

I think it quite likely that China will eventually become the world’s #1 economy, although the economy may experience uneven growth over the decades ahead. Moreover, the Chinese leadership could at some point face a serious threat. If Chinese economic growth stays around 8%, then all is more or less controllable. However, if some external event triggers a slump in growth, this could hurt job creation, boost unemployment and see a plummet in savings and real estate values. All kinds of resentments and dissatisfaction could surface, triggered, most probably, by a youthful urban population that is a by-product of China’s one–child policy and massive expansion of its higher education system.

Shoots of recovery or seeds of discontent?

Unemployment in America currently stands at 9.6% (US Bureau of Statistics). According to one survey, 44% of US families have now experienced job losses, pay cuts, or a reduction in hours worked. This is alarming but not catastrophic unless it becomes permanent, prompting a change in the collective psyche. It’s happened before but people were perhaps more resilient in the Depression and the structure of work is different now.

The first problem is young people. Until a few years ago, high school graduates could pick and choose jobs and jump from one to another. They expected jobs to be tailored to their own needs and had high material expectations. They weren’t exactly in charge but they felt they should be, largely because they had grown up with high self-esteem and a sense of entitlement. They were a result of the societal belief that children should always be made to feel good about themselves.

But the downside is lack of resilience and independence. Furthermore, many 20-year-olds will not take a job unless they feel it is “good enough”, preferring instead to be bankrolled by mum and dad. (According to a PEW survey, 10% of adults aged under-35 and 20% of those aged under-26 have recently moved back in with their parents.) Even if the US economy does bounce back, society has created a generation that is at odds with new economic needs. If you want an agile, entrepreneurial and innovative economy, you need self-directed people with perseverance, adaptability and humility.

The second problem is older men. Of 8 million US jobs lost since 2008, 75% were lost by men and 19.4% of men aged 25-54 no longer have a job. This is partly because much of the growth is in the service sector, which is dominated by women. Older men are probably less employable so, if the US recession is long,(or if America is entering a period of long decline relative to other nations) the consequences could be toxic.

If the economy gets worse the first consequence would be a period of disorientation and general anxiety. This would most likely be followed by issues relating to individual self-worth. This would all impact women too but men are likely to experience the full force of tarnished identity. Over the longer term, much would then depend on how the economy performed both locally and globally. However, there is a chance that individuals will feel more adrift.

If things were bad for a prolonged period we would probably see less divorce within the elite (because it’s expensive) but more domestic violence and substance abuse. In other sections of society we would most likely see less marriage but more children (because children bolster identity). Strangely, we might also see a rise in income inequality. This is odd because inequality usually falls during a recession but this time it’s already different. The latest data suggests that inequality is increasing, largely due to the impacts of technology and globalisation.

This sounds bleak because a lack of formal sector jobs (especially full-time employment) would accelerate many of America’s social ills. Jobs are not just about money. They help create identity and are a stabilising influence on family life and society as a whole. Without them we could all be in trouble.

Some interesting statistics

Here’s a few revealing statistics from Mary Meeker at Morgan Stanley. In the second quarter of 2007, Apple’s revenues were as follows: 47% Macintosh range of computers, iPods 40% and iTunes 11%. Fast forward to the first quarter of 2010 and the revenue figures looked like this: iPhone 40%, iPod and iTunes combined 24% and Macintosh computers 28%. Also, if you look at sales of PCs against sales of smartphones globally, you will observe that some time in 2010, smartphones will start outselling PCs. Interesting.