Retail Slump Shows Amazon Effect
. . . others are not. Retail is accelerating towards a new paradigm, there is no rest for the weary here. Read more below the fold.
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Robots Stake Their Claim in the Operating Room
So, what, besides pay, and prestige, is the difference between a surgeon, and an auto mechanic? Right, nothing, and the robots which replace both will likely charge you the same for similar services. Ok, the surgical robot will need additional cleaning, and sterilization, and its procedures will likely take a bit more time, after all screwing down a pipe clamp takes less time then stitching up the small intestine. So, what maybe double the price or perhaps triple for the surgery? The upside? Fewer mistakes, faster, no need for rest, 24 hour service. The downside? No wonderful surgeons bedside manner! All those out of work surgeons trying to wash my car window at every stoplight? A few years after this become common, mobile surgical robotic units will simply be dispatched to accidents and injuries to perform surgery prior to transportation, all for a fraction of the price of the surgery today. Cool! . . . it might be the place where 20 somethings go to retire, but increasingly they must do that living in the parents basement!
I spoke briefly with Abigail, a young woman who works at the local Starbucks as an assistant manager. She is a smart cookie, doing all the right things, but trapped in the hell that is the blue model. Wages in Portlandia are low, rents high, and the cost of living is fairly high when compared to the wage. You may remember a few days ago when I discussed the fact that Portlandia is the worst city in the country for Millennial housing affordability. Boomer versus Millennial Wrestling World Smackdown, Portland is out ahead, but Seattle is running a close second! Abigail is the poster child for this problem. She is educated, employed, and still not able to find work at a wage which allows her to live on her own. This even though she is an assistant manager. This is not a slight on the employer, but an indictment of the current blue model, and our unwillingness to make necessary change. Our conversation started with a comment on the high cost of rents in Portlandia. It roved from rent to wages, to college, and on to how difficult it is to make it on ones own today, especially for the young. We hit other areas like equal pay, saving, and opportunity. Walter Russell Mead has an article addressing this problem. Small Business Should Be Priority Number One I agree with the thrust of this post. The blue model was in part the attempt to counter balance big business with big government, big labor, big banking, big law, etc. The idea was to create huge institutions to help create space for the little guy to keep from being crushed by the bigs. The Internet, and the tech revolution has essentially altered the landscape, allowing the individual access to information which used to be the sole providence of the bigs. This was because information prior to the Internet was expensive to obtain, and expensive to store, collate, analyze, and make usable. This is no longer true. In the Internet age information wants to be free, and it is very difficult, probably impossible to keep information sequestered. The result is that in many situations the individual has the same access to information as the big, but is without the internal bureaucracy the big is saddled with. And so the individual is able to act on information more quickly, and frequently more profitably. Where it used to be difficult for a small business to compete directly against a huge corporation, today it is not. The small can fine tune and focus on the specific needs of a client or a small group of clients. These often forgotten clients are much happier with the individualized attention, and the extensive knowledge the small business usually has. This is one of the reasons for the massive, and ongoing crack up of the large mega law firms. The Boomers are doing a great disservice to our young people by continuing to focus them on attempting to find a niche in the old blue model world. Big business as mega employer is likely a thing of the past. The Mead idea here for a transition to the new socio-economic model is a very good start. The sooner the young people begin to think independently of the antiquated blue model, the sooner they will be able to find a niche and begin prospering from the collapse of the blue model. Perhaps we will need to reform welfare to create a better more usable safety net to allow these young people to take more risks in the entrepreneurial world? Please reread one of my earlier blog posts linked below. It offers a much more comprehensive analysis of some of these issues, and opportunities. The Stockman, The Donald, The Noonan all in one place! The guaranteed income could be an option which allows these young people to take necessary risks. Best of luck to Abigail. I have been toying with meeting with she and her boyfriend for a an hour or so sit-down session where I pick their brains to help me understand the Millennial better. I would be willing to part with $50 apiece. I will ask her next time I see her. High school student invents a cheaper hearing aid
. . . and we allow millions to fail. How many could have discovered other fantastic innovations like this? "When Mukund Venkatakrishnan was 14, he visited India and was tasked with helping his grandfather get tested and fitted for a hearing aid. He saw what a costly and difficult process it was and resolved to find an alternative. "Since audiologists are specialists, even finding and getting an appointment with one in India was really hard," said Venkatakrishnan, who is now 16. "And then we got ripped off." Venkatakrishnan said they spent about $400 or $500 on doctor's appointments and about $1,900 on the hearing aid itself. He realized that hearing is a luxury many people in developing countries can't afford. "In India, the median household income is $616 a year," Venkatakrishnan said. "If someone in India saves all year without spending a penny, they still can't afford a hearing aid." Venkatakrishnan's device is unique because it not only tests a person's hearing with a series of beeps, but it also programs itself to become a hearing aid. It only costs about $50 to make and can be used with even the cheapest set of headphones. Unlike with traditional hearing aids, if the ear piece gets damaged it isn't costly to replace -- you just buy another set of ear buds. In its current form, the device is about two inches and looks like a computer processor. Venkatakrishnan is planning to bring it down to about one inch and encase the operating system. He envisions the device, which has a standard headphone port, fitting into someone's pocket." Between these low cost free standing devices, and the use of smart phones as computing engine to perform the same kind of function, the world is facing serious deflationary winds for a very long time, and improved standards of living. It is criminal to allow any child to fail in school, and miss his or her opportunity to completely change the world for the better. The gig economy!
. . . it ends up being a solid look at what gig means, an etymological discussion, and an analysis of the economics of the gigger in the economy. Mish discovers, "In essence, virtually the entire increase in employment since 2010 was in the “gig” economy!" Growth, they name is gig! You really should also click through and read the very good Wall Street Journal article: Contract Workforce Outpaces Growth in Silicon-Valley Style ‘Gig’ Jobs The Journal finds that businesses are generally willing to re-evaluate the non-core functions within the business, and turn to giggers to obtain those services. The definition of "core" is not set, expect it to continue to grow and morph. This change allows businesses, and individuals to adopt the employment changes they want and need. Expect the antiquated Boomer progressives to fight this change tooth and nail. This change will limit governments control over either the individual or business. Progressives will be apoplectic about this. On the other hand, the Millennials will be fighting for these changes tooth and nail. Millennials want more flexible employment, and more control. While it is hard to tell which way this will swing right now, the following article seems to indicate that Boomers are slowly losing some of their power in the market. Tough Markets Catch Up With 1956 Ferrari High end cars are a Boomer investment. There are a few Millennials who like cars enough to invest in them. The GenX'ers are half in half out with the older half of the cohort looking more like Boomers, while the younger half looks more like Millennials. Also, it is the oldest half of the Boomers who are car crazy, The same group that brought us American Graffiti. Expect the car investment craze to lose steam over the next decade, and then begin to fail more rapidly thereafter. This may show us that the swing discussed above may move more rapidly towards the Millennials from now on out. I fully expect the Millennials to continue to move forcefully into the gig economy, making the world the Boomers understand that much smaller. A $20,000 Self-Driving Vehicle Hits the Road
. . . and at $20,000 the cost is acceptable. All we need do now, is spike the price supports for the electric and hybrid vehicles which do nothing, and prod insurers to charge appropriately low rates for these safer vehicles. "While federal officials and lawmakers ask questions, however, many safety advocates want Washington to immediately make these features standard on the millions of light vehicles sold in the U.S. each year." By all means, legislate the creativity out of the system. We all know how legislating something makes it better, after all licensing drivers has been the rage for ever, and heaven knows we are nigh on to perfect now, right? This desire to do something is foolish, and unnecessary. Once these systems are more commonplace, insurers will begin charging less to insure those cars. Today's young men pay absurd amounts for auto insurance. This will be ameliorated once the car won't let the super charged young men crash them into other things. The drop in insurance rates is likely to only accelerate as fewer collisions and less costly repair bills drive down costs. Low priced self drive autos will save lives, and result in lower transportation costs. This will accelerate as Uber and the other ride sharing services begin to replace human operators with AI. This will create a loop of ever increasing safety, and lowering costs. A true win/win for everyone. Driverless Trucks, Driverless Cars, and Unmanned Food Stores, what’s the world coming to? Like Mish I have long thought that this revolution will come full force by 2020, and will be unstoppable. By all accounts, vehicle operations will be much safer, and once we see the Uberization of the transportation network, much cheaper. And how much cheaper, and more convenient will things be when stores are either Amazon mail order operations, or unmanned?
The tech shift away from human operators, and attendants is just beginning. It will lower costs, increase services, and make our lives better. It will also usher in an entirely unknown future, which will create a serious amount of uncertainty, confusion, and fear. The French union members will likely revolt over changes like this, and the stodgy French economy will be unable to take up this slack, leaving thousands in a much worse off position. The same will happen in throughout Southern Europe. Change is coming, fast. This would be a good time to prepare. |
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