12 Sep Ready For Launch

READY FOR LAUNCH

Many of you will have read numerous stories whether Trump or Kim Jong Un – will they or won’t they ? I won’t bore you with that (although I am no expert in foreign relations I believe that China & Russia to a lesser degree will be doing a fair bit or work behind the scenes to downplay the current situation – I don’t think they want full scale biffo on their front door step)

What is of more interest to me (and potentially you) is the changes currently moving through economies world wide through the evolution of technology and the rate that it is increasing by.

In Adelaide there is a company headed by Flavia Tata Nardini an Italian Rocket Scientist (true story) called Fleet Space which is going to be launching nano satellites into space – 2 nano-satellites are projected to go up next year and 100 by 2022. The purpose is to connect up the Internet Of Things (IoT – Sensors for all manner of objects & machinery, etc.) – a scalable network whereby allowing devices to communicate with each other around the world. There was an excellent story on Flavia & Fleet Space in the Saturday Advertiser only a few weeks ago – I provide links below for you to read.

https://www.fleet.space/

https://www.adelaidenow.com.au/lifestyle/sa-weekend/rocket-woman/news-story/43bbca266f59d788ebf551a93c95920b

This is just one local example of a new business being generated through advances in technology, but you only have to look at the larger world to recognize this. As an example let’s firstly look at the world’s 10 largest companies 10 years ago, compared to 10 largest today.

Worlds Ten Largest Companies By Market Capitalisation (as measured by Financial Times 30th June)

2007                                                 2017
Exxon Mobil                                     Apple
General Electric                               Google (Alphabet)
Microsoft                                         Microsoft
Royal Dutch Shell                            Amazon
AT&T                                                Berkshire Hathaway
Citigroup                                         Johnson & Johnson
Gazprom                                         Facebook
BP                                                   Alibaba Group
Toyota Motor Corporation              Tencent
Bank Of America                            Exxon Mobil

10 years ago there was only 1 tech related stock (Microsoft), whereby today there are only 3 non-tech stocks in the Top 10 (J&J, Exxon Mobil & Berkshire Hathaway – although Berkshire Hathaway is a managed fund which invests in things like Apple, amongst others). Microsoft has held it’s spot over the past 10 years, but it’s market capitalisation has actually doubled in size. Compare to Exxon Mobil whose market cap is now only marginally greater than it was in 2007.

Compare this to some other businesses that rely on technology that didn’t existing 10 years ago

Biggest car service in the world that doesn’t own 1 car – Uber
Biggest Accommodation Group in world doesn’t own one building – AirBNB

I can say that in our travels we have used both Uber & AirBnb extensively. In 2011 Uber didn’t exist in San Francisco & we used public transport. In 2016 not only Uber but another competitor Lyft operated extensively and we found it far more convenient & cost effective to use Uber compared to public transport to get around.

What Else Is Happening ?

We are progressively moving to a cashless & mobile dependent society. Already I use very little cash nowadays and stores in general accept card payments through EFTPOS. Newer competitors like Square offer card payments and you will see many tradies being able to accept payments from you via Smart Phones & Tablets. For those of you shopping online you can pay through Paypal a secure online system & regular payments can be made via direct debit &/or BPay . Who uses cheques nowadays ?

You may find this surprising though – apparently > 80% of world’s financial transactions are still made via cheque or cash (think India, Asia, Africa, etc.) so there is major scope for increases in electronic payments.

I Want It & I Want It Now !

Gone are the days of waiting for the morning or afternoon newspaper. Anybody with a mobile phone is a journalist nowadays. If you want to know or watch something you just dial it up on your Tablet/Phone/PC/Smart TV.

Traditional media has suffered as sales of newspapers decline (my 19 year old said to me the other day – who reads newspapers ?) and Free TV suffers through downturns in viewers and thus advertising revenue. Advertising revenue is shifting to the online players (think Facebook & Google) & viewers are switching in droves to streaming or on demand products like Netflix (believed to have > 100 Million subscribers worldwide) & other Behemoths like Amazon & Apple (Apple have committed $1 Bn to producing content over the next year) entering the fray. You only have to look at Channel 10 which went into administration recently & has been effectively bought by the US CBS TV Network. Their CEO Leslie Moonves said that traditional TV operators are “competing with industries that could eat us alive & the only way to compete is through producing original & quality content”

An Australian company called IFlix is taking advantage of this throughout Asia by offering an on demand streaming service suitable to be viewed on mobile devices, all for the monthly cost of a pirated video ($2 per month). IFlix are targeting Millennials who are on the go and want content available at their fingertips.

Advances in Medical Technology

Genome mapping is coming to Australia & will be available via selected GP’s through a company called Genome.One at an initial cost of AUD $6,400.

Genome mapping identifies all of a person’s genes and is believed to help identify future health problems, meaning health providers can focus more on preventing disease, rather than playing catch up after a person is diagnosed with a specific ailment. Only in April of this year Australian researchers were able to map the genome of a prostate tumour (prostate cancer apparently is the most commonly diagnosed cancer in men)

Whilst some might say that $6,400 is a lot to pay for Genome mapping, in the USA the cost per person was USD $100m in 2001 (yes that is right $100,000,000), which has now reduced to approx. now USD $1,000 per person. Further cost reductions could be expected over time in Australia as well as the technology gets better and is used more widely.

Artificial Intelligence & Rate Of Change

These are some of the changes just over the horizon.

Augmented & Virtual Reality (The new Apple IPhone is believed to offer AR or VR), Entertainment options (think a 3D hologram in your living room or AR or VR options) , Intelligent Digital Assistant (Google Home – currently being advertised by Harvey Norman)

White Collar Repetitive tasks going the same way as blue collar – Anything that can be completed in a repetitious manner has the ability to be taken over by AI. Think Accounting/Admin/Clerical jobs, etc.

A recent example is an Australian Company – Sen Sen –which is raising $4.5m for Video Analytics/IoT program for parking cheats. They are promoting that they can catch as many cheats in a day as a council inspector can get in a year !

https://www.sensennetworks.com/

Another is online accounting software group Xero. Xero are promoting this week that they offer policy makers & regulators far better data than surveys offered on small business by Roy Morgan or NAB through analysis of live data on up to 500,000 different entities – this is to be provided on a weekly basis. This analysis can track whether in aggregate businesses are cashflow positive, time for payment of debtors, hiring workers & payroll obligations. This compares to business surveys conducted manually on a quarterly basis of between 500 – 1,000 businesses Australia wide. This gives regulators/policy makers real time data and shows the actual impacts on business each week.

https://www.xero.com/au/

Driverless cars

My Silvia says that she will never get into one of these but they are coming and they are going to be here quicker than you think. Tests are already being completed and in the USA Dominos are trialling a driverless car to deliver pizza’s to customers. Think about the impacts here & the industries which will be affected (and this list probably isn’t exclusive)

tourism, crash repairers, motor vehicle manufacturers, insurance companies, couriers, public transport, taxi’s, Uber/Lyft, car parks, toll roads, funeral parlours (1.2m deaths worldwide in car accidents every year), finance companies – who needs to own a car ?, police, ambulances/paramedics, military – I could go on & on

Summary

So we live in exciting times and future generations or workers (like my kids and your kids/grandchildren, etc.) & businesses will need to be nimble on their feet (can anyone say Kodak) and be accustomed to learning new things to adapt to future work places & work practices.

So are we ready for launch – you betcha we just better learn to hang on for the ride.