Keith,
Something new
to me.
I installed a
Linux version by simply booting from a CD within my XP operating system. On the
700 megabyte disk was 1,700 megabytes and apparently it can take 2 gigabytes.
It’s a
process called “transparent compression”. Never heard of it before,
but it means a complete movie an be burned on to a single CD disk. At the
moment one must use a DVD disk – which is more expensive.
Interesting!
What else don’t we know?
Needless to
say, we are looking.
Harry
********************************************
Henry George School of Social Science
of Los Angeles
Box 655 Tujunga CA 91042
Tel: 818 352-4141 -- Fax: 818 353-2242
http://haledward.home.comcast.net
********************************************
From: [EMAIL PROTECTED]
[mailto:[EMAIL PROTECTED] On
Behalf Of Keith Hudson
Sent: Thursday, December 18, 2003
12:34 AM
To: [EMAIL PROTECTED]
Subject: [Futurework]
What Keynes and Schumpeter thought about time
214. What Keynes and
Schumpeter thought about time
A curious phenomenon is occurring at the present time in the consumer market.
In America and England, two countries in which economic growth seems to be
powering forward in the last quarter (especially in America) and in which
interest rates are very low, retail sales are not responding to anything like
the same extent. This may partly be due to the fact that the average customer
in these two countries is strapped with high credit card debts, but I have the
feeling that this is more general -- that it includes the middle-class
customer, too. I have no hard evidence for believing this. It is a feeling I
have in reading general articles in the press, seeing the junk mail coming
through the letter-box, reading economic journalists -- it's something in the
air, but the scent is quite strong. If this is happening it might only be
temporary but somehow I don't think so.
It's a time factor again. Two of the greatest names in economics of the last
century, Keynes and Schumpeter, both thought that time was an important factor
in the scheme of things. John Maynard Keynes confidently forecast that, with a
steady 2% of economic growth and the constant introduction of innovative
time-saving machinery, then the average individual would only need to work two
or three hours a day within a decade or two. Well, that certainly hasn't
happened. Keynes would be incredulous if he discovered that the average factory
worker was working between 45 and 50 hours a week now -- much as he did in the
1930s -- and, even more surprisingly, that the average professional and
managerial worker is, if anything, working twice as many hours a week -- say,
about 50-55 hours -- than he did in his day. For Keynes, the present day should
have been times of luxury and leisure
Joseph Schumpeter thought much the same, too -- though he foresaw quite
different consequences of increased leisure. He thought that the most relaxed
classes of all -- the middle-classes and intelligentsia -- would have enough
time to start to question the moral framework of capitalism. He laid all this
out in his majestic work, Capitalism,
Socialism and Democracy. Capitalism, he suggested, would destroy
itself because its prime actors would begin to ask questions about income
inequality, justice, pollution and so on. Schumpeter didn't believe that
Capitalism would survive.
I don't like the term Capitalism because it has gained pejorative overtones
since Schumpeter's day. I'd prefer to be less ad
hominem and use the term Consumerism instead. After all, we are all
consumers! But I also think that Consumerism will fail for temporal reasons.
But this time, not because of too much spare time on the part of the
trend-setting intelligentsia but too little.
There is a golden nugget in the following article about digitalisation and its
consumer goods -- which, incidentally, are all embellishments of existing goods
and are therefore not stratum goods. They start with modest profit margins and
don't produce vast swathes of further investment. The aperçu occurs right at
the end where Simon London refers to Seth Godin's book, Purple Cow, which I haven't yet read but
intend to after reading this piece.
Seth Godin makes a very acute and, I think, highly significant, observation
which bears directly on my hypothesis. This is that that the initiatory class
of consumers is no longer a sitting duck for marketing people. They haven't the
time any longer to sit around and be bathed in a plenitude of advertising from
their TVs, or full-page ads in their newspapers or the big advertising
hoardings in public places. These people -- the trend-setters -- have now
learned to take not any notice. They have too many other things to do, have too
much on their mind. (As I read my daily newspaper, I often come across an indication
that a double-page spread is next. I don't even turn the page to find out what
the advertisment is all about or the firm that is advertising whatever it is. I
simply jump two pages forward. That double-page never sees the light of my
consciousness. I am sure I am not alone.)
Instead, Seth Godin maintains, the discriminating consumer (that is, the person
with money) seeks out the necessary information about a desirable product he
wants for himself. If there is to be an all-singing all-dancing stratum good
which will stimulate the developed economy into a new surge of consumerist
demand then it will probably hit the producer by surprise. We have indications
of something similar to this already. The MP3, for example. This never was a
stratum good because it was priced low from the start and therefore reached
massive sales within months. But it was never advertised. Its availability was
spread by word of mouth. Another reason why it was not a stratum good is that
it didn't exact more time for its use from the consumer. In fact, by being able
to record music directly from the Internet (and usually just one track from a
whole 90-minute CD) without having to traipse into town and browse in a shop,
the consumer was saving time.
Both of the blockbuster stratum goods of the last century -- the car and the TV
-- made huge inroads into the spare time of the consumer. I am sure that there
are going to be large numbers of new digital goods in the coming years and all
sorts of specialised goods but they are all going to be superior versions of
spending time which is already being spent. There is no more spare time for the
sort of stratum goods which will boost economic growth for much longer.
Keith Hudson
<<<<
DIGITAL DISCOMFORT: COMPANIES STRUGGLE TO DEAL WITH THE 'INEVITABLE SURPRISE'
OF THE TRANSITION FROM ATOMS TO BITS
To prosper from digitisation, businesses may have to be bold in identifying new
opportunities and devise more inventive ways to catch customers
Simon London
Type "digitisation" into Amazon.com's new Search Inside The Book feature and you get back a list of
1,176 titles. Along with the usual roster of authors and publishers, you also
get to browse pages relevant to the search.
Before deciding whether to buy Stan Gibilisco's Teach Yourself Electricity and Electronics (McGraw-Hill, 3rd
Edition, 2001) you can read page 510 which contains a passing reference to
digitisation as a prelude to a treatise on digital signal processing.
Too arcane? Then how about page 180 of Straight
from the Gut, Jack Welch's managerial memoir? Or pages 40, 156, 211
and 221 of Best Practices in Planning and
Management Reporting by David Axson?
The new search feature is in itself a reminder that, more than a decade after
digitisation became a buzzword, its impact is being felt in new and different
ways. By scanning every page of 120,000 volumes -- 33m pages in total -- Amazon
has for the first time brought a significant chunk of the English language book
catalogue into the digital domain.
While Amazon has taken precautions against piracy -- the electronic facsimiles
are virtually impossible to print or download -- the long-term implications for
authors, publishers and rival booksellers are profound. As with other media,
once books are digitised they become not only easier to search but also easier
to copy and share.
The wider point is that while industries ranging from travel to securities
trading have already been transformed by the transition "from atoms to
bits" -- a phrase coined by Nicholas Negroponte, head of the Media Lab at
the Massachusetts Institute of Technology -- other sectors are only now
starting to feel the impact.
Many of the business and social stories of 2004 will revolve around the impact
of digitisation on, among others, broadcast television, conventional telephony,
publishing, the motion picture industry, health and education.
"People tend to confuse the secular trend [digitisation] with the cyclical
phenomenon of the dotcom bubble," says Gary Hamel, an author and
consultant on corporate strategy. "It is clear to me that the secular
trend remains intact."
For evidence, look at the business pages. Digital discomfort is widespread: in
Kodak's cathartic decision to focus its resources on digital imaging; in the
record industry's attempts to regain control through the courts of digital
music distribution; in the challenge posed to telecommunications companies by
internet-based telephony; in the collision of consumer electronics companies
such as Sony and Matsushita with the big names of personal computing -- Dell,
Hewlett-Packard, Gateway and Apple.
Then there are companies that are finding ways to harness digital technology to
add value to their products. Examples here might include OnStar, General
Motor's in-car telematics service or the global positioning system (GPS)
service that enables users of John Deere farm equipment to plough or spray to
an accuracy of two inches.
"This is not just about the transition from atoms to bits," says John
Hagel, a Silicon Valley-based consultant. "It isdigitally e3nhanced
atoms."
The obvious uestion is why, given the progress of digital technology, over at
least 30 years, digitisation continues to catch companies by surprise. After
all, the force behind digitisation is Moore's
Law, which predicts a doubling in the number of transistors on a chip every 18
months. This trajectory has more or less held since the 1960s, when it was
first propounded by Gordon Moore, Intel co-founder.
The mobile camera-phone, one of this year's consumer gadgets, is a prime
illustration of Moore's
Law at work: billions of transistors in an affordable, hand-held package,
enabling digitisation and high-speed transmission of both voice and images.
If the sales success of camera phones this year took some companies by surprise
-- step forward Motorola, which was both late to the market and failed to
secure sufficient component supplies to meet demand -- it was surely an
"inevitable surprise", the phrase used by Peter Schwartz, the author,
to describe sudden but foreseeable events.
In the same category fall other instruments of digitisation, including the
sub-$400 (£230), five-megapixel cameras that have led the consumer stampede
this year away from film-based photography, the affordable 40-gigabyte disk
drives that power the latest generation of portable digital music players and
the steady improvements in "voice-over internet protocol" (Voip)
telephony.
Why did companies fail to see this coming? The trite answer is that they often
did -- but were too closely wedded to existing products to respond.
As Clayton Christensen, a professor at Harvard Business
School, points out, there
is more than managerial myopia at work.
Given the choice between investing in a proven technology in a known
high-margin business where you have clear competitive advantage or investing in
an unproven technology in a new and probably low-margin business where sources
of competitive advantage are in flux, it is perfectly rational to choose the
former. This is especially true if the unproven technology threatens to cannibalise
your existing, lucrative business.
The 30-year struggle of Xerox to come to terms with digitisation is a textbook
example of how these powerful forces can play out. Senior managers realised in
the late-1960s that Xerox's dominance of photocopying, an analogue technology
it pioneered, would expire along with its patent portfolio. In 1970 the group
opened its Palo Alto Research Centre (Parc), in California's
Silicon Valley, to search growth opportunities
in the emerging digital realm of "office automation".
Yet, in the ensuing three decades, Xerox managers decided against making risky
bets on the new-fangled computer and networking technology that Parc scientists
had invented.
Meanwhile, rivals such as Apple Computer and 3Com commercialised breakthroughs
including the graphical user interface and ethernet networking. At Xerox,
xerography took precedence.
These forces equally help explain why Motorola in the mid-1990s resisted the
transition from analogue to digital mobile phones -- a stragetic misstep from
which it has arguably never fully recovered.
More recently, they help illuminate the predicament of Kodak, which long ago
recognised the opportunities and threats from digital imaging but waited until
this year to make a decisive break with chemical-based film.
There is more to navigating the digital revolution than plotting
transistor-counts on a graph. The transition from atoms to bits is also
dictated by the less predictable progress of telecoms bandwidth and
compression, the technologies that allow digitised content to be stored and
shared.
Indeed, the rate of adoption of digital photography has been dictated not only
by price-per-pixel in cameras but also by the spread of e-mail, broadband
internet connections and affordable home printing.
Similarly, downloading music from the internet achieved mass popularity only
with the arrival of MP3, a compression technology that offers a reasonable
compromise between musical fidelity and convenience.
Hollywood now
faces a similar challenge in the form of DivX, a compression "codec"
that can squash digital video into files small enough to be stored, copied and
shared. Is DivX the MP3 of Hollywood?
Or will Tinseltown be spared for another few years?
"One of the things we have learnt about technological progress is that we
often get the direction right but the timing hopelessly wrong," says
Robert Mittelstaedt, vice-dean at Wharton
Business School
at the University
of Pennsylvania.
----
About the general direction, however, there can be no doubt. Digitisation is in
full swing. Companies that prosper will be those that anticipate how this will
effect not only costs, products and processes but also customer expectations
and attitudes.
"The least appreciated effects of digitisation are the fragmentation of
customer attention," says Mr Hamel. "Customers become harder to find
and more difficult to keep."
In Purple Cow, among this year's
best-selling business books, Seth Godin argues that the 21st-century consumer
is too busy, and faces too many choices, to respond to conventional marketing
tactics.
In particular, he argues that people have ceased paying attention to
advertisements on television or in print. "The old rule was this: create
safe, ordinary products and combine them with great marketing. The new rule is:
create remarkable products that the right people seek out," he says.
If Mr Hamel and Mr Godin are correct, companies will have to rethink their
supply chains (how goods are made) and their demand chains (how goods are
marketed and sold).
Moreover, this puts in jeopardy the fate of all companies, not only those whose
products are being digitised.
Sceptics will object that there is nothing new in any of this. Prophets have
been sounding a digital death knell for mass-market advertising since the
mid-1990s. Indeed, the term "viral marketing", often used to describe
the alternative word-of-mouth approach, was coined in 1997 to describe the
spread of Hotmail, the original free e-mail service.
As with digitisation itself, however, the fact that the message is familiar
does not mean either that it is wrong or that it can be safely ignored. Want
proof? In Amazon's Search Inside The Book a
search for "business failure" yields no fewer than 69,267 results.
Financial Times -- 18 December
2003
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