Let’s get real: We won’t build true value via social media
Personal tech will change from being a convenience to being an invasion, a plague. It’s started already
Money and value are two different things, although you could be forgiven for thinking differently because the line that divides them becomes increasingly blurred. Nevertheless the challenge is to differentiate between enduring and transient value, and how to create, distribute and store it.
We’ve seen a sustained period of increasing values for companies listed on the stock market, practically unbroken since the financial crisis of 2008/9. There have been variations across markets, currencies and geographies, but it is clear that technology-based, particularly consumer technology-based, companies have primarily been responsible for the increase in index values – accompanied, until fairly recently, by their trusted companion, financial services (they join in, whatever is leading the charge). I don’t think it’s going to last much longer.
The new valuation metrics don’t reference any past achievements. It’s about the future, unbounded expectations. It’s about “client acquisition strategy”. While the economics of your product or service offering is directly correlated to the number of people who want to use it, you are not alone. How many more apps can we download (and use) and how many more social media communities can we join (to get our “like” boost in the morning)?
Of course, the base line is increasing, but world population growth peaked at just over 2% (about 50 years ago) and it’s probably going to level off below the current 1% for the foreseeable future. So the techno-personal companies are, at best, going to share smaller and smaller pieces of us, if the growth metrics are to have any foundation.
We have to look deeper to find the turning points and analyse the unintended consequences of increasingly sophisticated, personally accessible, powerful technology – capable of being almost invisibly housed in ever tinier microchips.
It will, soon enough, change from being a convenience to being an invasion, a plague. It’s started already. Ask anyone who has children older than, say, four. But never mind the nuisance or antisocial aspects, soon enough it will be cool to be anti-social media.
The real issues are invasion of privacy, ultimately leading to (if not actually designed to) predict and control human behaviour on a grand scale. Everything we do or see or show or buy or read is recorded and used to direct what we’ll do or see or … next time. Those clever little developers with the weird hairstyles are way ahead of the simplistic invasions we currently measure and debate and seek to regulate.
Yes, this is all economically valuable, but it’s going to turn on itself as we fight back for our space.
The value of “real” assets, like basic consumables, or energy, old technology, or industry, or property are languishing, driven only by such old-fashioned notions as population growth and demand-pull (rather than supply-push), and squashed by alternative, much lower unit cost, technological solutions. Automation, longevity, health care, globalisation … these are the new trends that drive, or crush, enduring value or relative sector performance.
But that is in near full employment economies and we’re playing serious catch-up. Quick fixes are not going to cut it. We must go back to basics. We have to create and admire the urge to work, rather than the need to be satisfied, now. The prospect of personal economic dignity is far more powerful, and enduring, and healthy, than the sugar-coated candy of instant gratification we’re all chasing (of which there is only so much in ready supply).
It’s much easier to make a profit than to build a sustainable business. Really, it is. Just cut costs, sell assets and take short cuts until you get there – but you’ll get found out, even if it’s only after you leave, with your bonus.
Gain without effort is at best transient and ultimately disappointing, if not personally depressing. Accountability precedes self-respect. The best parties are after a hard day’s work.
Jobs are created in “real” industry, industry in which automation is limited and labour, human skill and judgment are required. These real economy initiatives, manufacturing, industrialisation, utilities, property … for us, now, are the stuff of enduring value and personal achievement.
Profit will come, but it follows earnings, and for now we just have to build things and reward people for finishing their homework on time. That will be the stuff of nation building and common purpose that will close the gaps between us. Those are the foundations of value.
Mark Barnes is CEO of the Post Office.