Happy New Year to our readers.
I've been playing around with a set of thoughts and keep bumping into several of them every day with my workshops and seminars. We discuss them with Alan Moore in our book Communities Dominate Brands and regularly at this blog. These are not the only trends going on in our lives, but they seem to be very inter-twined and I wanted to give them a larger treatise. So this New Year's blog entry felt like a good time to take a look at ten major trends impacting our lives all around the world. Some of them have been going on for decades or even longer, others arrived only within the last few years, but they do inter-relate. I'll take a look a bit at the converging trends.
So what do I mean? I'll look at digitalization, miniaturization, the internet, messaging, virtuality, user-generation, collaboration, mobility, richness of content (the shift to ever more rich content in fact) and ever higher speeds. Sound familiar? Sure. And you can probably immediately pick a few that are impacting your life, your business, your career, your family etc today. And yes, obviously these are not the only trends, we have fragmentation of time and attention span, for example, or say the interests into "green" products and services and lifestyles. But I think these ten are all kind of related but have interesting facets to them, so lets examine these ten related trends for 2008 a bit more.
Digitalization. We got the digital revolution as a bonus of the space programme and its first manifestations were pocket calculators and digital wristwatches in the 1970s. Today digitalization seems to have invaded most parts of our daily lives from the microwave oven to the car to our music (CDs, MP3s, iPods) and movies (DVDs). My point is that digitalization is spreading and has not even reached half point in its total spread into our lives. Already today we find farmers who manage their cows via GPS/GSM chips; we have pets that can be tracked with location-based collars; and forests in Finland are managed by which every tree is individually tagged with a GPS/GSM gadget.
Ever more industries that once thought they were safe from digital disruption are feeling it. Last year we reported on breaking news services and even printed books migrating to mobile phones. We've discussed how the fashion industry is now entering digital worlds with blue jeans and tee-shirts made now with display screens. Music is now sold almost exclusively in digital formats (CDs, MP3s) and movies have seen the same shift where most video stores have abandoned VHS cassettes and only stock DVDs and higher definition digital media. Any business, any part of life, will be hit by digitalization, TV is going digital, radio is going digital, movies are going digital, etc. The future impacts of digitalization are greater than the past disruptions have been so far.
Miniaturization. A closely related trend to digitalization is that of miniaturization. It actually started earlier as a mass market proposition, with the transistor radio of the 1960s. Since then we've seen many of our gadgets and devices shrink dramatically. Consider your plasma screen TV compared to the old huge TV box. Or the total capacity for music consumption on an iPod versus a walkman and a suitcase full of C-cassettes it would have required in the 1980s.
I did a presentation for the Canadian Wireless Telecoms Association in 2005 about the future of mobile phones, where I analyzed what the IT world looked like 20 years earlier. I found that in 1985 the most powerful computer in the world - an early supercomputer, was the Cray XMP. This massive computer was arrayed like a dozen giant refrigerators and took the space of a whole room. The Cray XMP had 32 MB of RAM; a hard drive of 2 Gigabytes; its processor ran at 118 MHz and its processing power was measured at 250 MIPS (Millions of Instructions Per Second). So this was the world's fastest computer in 1985. Twenty years later, in 2005, a top end Nokia smartphone, with the optional 2 GB memory chip for storage, had the same performance in the pocket. A supercomputer in the pocket !! Thats what we have today and we mostly take it for granted, already wishing for the next model with the higher resolution camera or the GPS chip, etc. What drives this is Moore's Law and it has held remarkably fast for the past few decades. We can expect that the power we have in our pockets will continue to expand enormously over the next years and decades, so fast and so far, it does become almost impossible to even imagine what we'd be doing with all that power in our pockets.
But to put it in context, I also did a calculation of a "wish list" back in 1985. I took an old electronics store catalogue from 1985, and selected the top items in all major categories from the cameras and zoom lenses and flashes to the video recorders and camcorders, to the walkmans, PDAs, pocket calculators, etc. I added them all up and it came to 30,000 dollars, the price of a new Cadillac in America in 1985. Again, fast forward to 2005 and we have all that functionality built into a standard high-end smartphone. Not necessarily always as good obviously, but in some cases far better than what was possible in 1985. But yes, miniaturization benefits from digitalization and vice versa. And an extreme area of miniaturization is of course nanotechnology, an ever more viable industry sector for this year.
Internet Protocol (IP). The internet protocol and the related internet and web applications and content hit the mainstream in 1994. IP services and applications are obviously digital, so digitalization is a pre-requisite for IP and we consume IP servivces on digital devices such as the PC, laptop, PDA, mobile phone and so forth. Obviously you the reader know of the internet as you read this blog via the web. The internet protocol has had a profound impact to our lives, from wiping out whole industries such as the retail stores for travel agencies and music stores to creating new opportunities such as eBay and Google. Early on many suggested the internet was more of a nuisance factor and would not alter society that much. Now we do see massive impacts to our lives. We reported here for example of the real-time blogging of pre-school age kindergarden kids going to the zoo and having their lives chronicled in real time to a blog, that the parents could follow from work.
How far will this change go? Governments and big business already do much of their purchases and enterprise resource management and customer relationship management through systems that depend on the internet. But again, we have to bear in mind, that five years ago while we had many of the household names of the internet such as Amazon, Google and eBay, there was no YouTube, no Flickr, no Wikipedia, no Skype. How many other fantastic revolutions are still being developed. The internet will impact the next decade more than it did the past. A very important impact of IP technology is our digital footprint, as Alan Moore calls it, the black gold of the 21st century. The more our lives migrate to the internet, the more it becomes possible to track what we do there. And our internet devices will be ever more miniaturized, certainly now in an age after the iPhone, we can see that the long term trend for internet consumption will be the pocketable device, closer in heritage to today's smartphone than to today's laptop.
Messaging. This might sound like a strange item to include, but I feel it is dramatically under-appreciated change in society, with enormous reach and impact. We learned to message with early email systems on mainframe computers in the 1980s and with the PC based internet in the 1990s email hit the mainstream. By the end of the decade we had IM Instant Messaging and SMS text messaging to add to the mix, and today we can also include picture messaging. Messaging is a different form of communication to talking, as it is asynchronous. I can send you a message, and you can respond when it suits you. You don't have to be active with me to receive my part of the message, and if there is a response needed, that can be delivered without actively engaging me. We can send messages when both are also actively involved say in meetings or for example when on different time zones and the other one is sleeping, we can exchange messages efficiently without needing to be "awake" at the same time.
Communication by electronic messaging is a very powerful way of delivering ideas and today's business, governments, schools, even family lives would be permanently damaged if the messaging tools, email, instant messaging and SMS text messaging were suddenly removed. And also bear in mind their relative scales. IM Instant messaging has about half a billion users worldwide. email has about a billion. But SMS text messaging is used actively by 2 billion people. So when we talk about messaging, the most relevant form is definitely SMS texting. There are many who deplore the messaging culture that it diminishes face-to-face communication and even weakens skills in talking, but I'd argue that where messaging is more efficient (multiple communications, copies, replies, threads, with a record of the discussion, etc), it is a more valuable skill in the modern digital and IP based world than talking ! For example the US military is now introducing ever more powerful battlefield communciation systems for their tanks, planes, ships and troops in the field, which all include messaging as the preferred means of communciation under battle duress. Numbers, addressses, casualties, map coordinates, etc are much more accurately communicated via text than saying them outloud and having them perhaps mis-heard at the other end, especially in the often noisy environments of the battlefield.
But most of all we see the shift to a permanently connected being, the "hive mentality" as SubTV CEO Peter Miles calls it, where young people are nearly telepathically connected to their mates at all times, even when sleeping - as 20% of teenagers regularly are awoken by SMS text messages sent at night. Consider the stats that already 10% of British students, and 30% of South Korean students send on average 100 SMS text messages every day (the worldwide average for the 2 billion active users of SMS texting is about 2 SMS per day). For those who thumb out 100 messages every day, there is no need to think, to look at the keypad, to search for characters. The communication happens almost at the speed of thought. I have talked about this being a transition for mankind, from us, Homo Sapiens, to the next humans, Homo Connectus, permanently connected to their best friends all the time. Or like we write about it in our book, this is Generation C, the Community Generation.
How big will it become? Remember that in the 1980s the only electronic written communication was by fax. The whole messaging culture started in the 1990s. Today almost one in three people on the planet send messages (mostly on phones, obviously). Fishermen in Africa send messages to their village stores and get best offers for their catch of the day. Regular employees in the Philippines get their paychecks sent directly to their phones and they then make payments - as SMS text messages - to anyone where they want to pay or even to withdraw actual cash. Last year we reported that a British night club was the first one in the world where to a special evening you could not even get in, unless you bought your ticket onto your mobile phone. Now airlines from Finnair in Finland to All Nippon Airways in Japan allow check in via SMS texting. Messaging will become much more relevant in our lives than it is today, we haven't seen anything like the biggest impacts of it yet.
Virtuality. I was tempted to say virtuality started in 1999 when the first virtual online multi-user environment went live in Finland around the Virtual Helsinki project but I have to revise it to earlier. We actually got into the virtual worlds in a mass market way with the first virtual reality type "first person shooter" style videogames like Doom, Quake and their predecessor Wolfenstein. Doom was the first major videogame to allow networked gaming with up to four simultaneous players inside the virtual world of Doom. And a major milestone was the tamagotchi, the first virtual pet. So for the mass market virtualilty really started in the mid 1990s. Today we have the massively multiplayer online role-playing games like World of Warcraft, Everquest, Lineage and CounterStike; and virtual worlds like Second Life, Habbo Hotel, Cyworld, etc. Virtual reality is appearing in many areas of high-end training from pilots, astronauts and tank commanders to more everyday uses such as corporate management training etc.
This is an area that is very difficult to get any understanding of, unless you happen to have experienced that part of the digital world. It is relatively easy for heavy gamers to understand virtuality and essentially all under 20 year olds - for whom after all the tamagotchi was their first ever pet - get virtuality instinctively. It is perhaps illuminating to observe that Second Life has about 2 million registered users worldwide (mostly adults), of whom only a small part are active users. But the children's virtual world, Habbo Hotel, originally from Finland, has passed 80 million registered users (also most are not active) and has nearly 2 million active children users in the USA alone.
For adults, virtuality is an acquired taste. When I ask my workshop audiences how many have created an avatar of themselves, usually it is about 10% of the room and mostly I speak to techie-nerdy professional audiences involved in the digitally converging industries, so you'd expect a higher-than-average adoption of such new concepts. But talk to teenagers and it seems all of them have created some avatar somewhere. And looking at South Korea, like we report with Jim O'Reilly in our book Digital Korea, already 43% of the total South Korean population have created an avatar of themselves. And like we reported last year, the value of virtual properties created in virtual worlds and sold in the real world for real dollars (such as on eBay) is now a billion-dollar industry.
This is the real new bonanza. This is the honest new gold rush for our generation. Not setting up colonies on Mars or the moon or into space tourism hotels. Those may happen some day, but the real biggest growth opportunity right now is that which is inside the virtual worlds. Thousands of people, probably already tens of thousands, earn a good living full time inside virtual worlds. Some are star players with mega sponsorship deals inside multiplayer games like Kart Rider. Others are innkeepers and various virtual businesses inside World of Warcraft. Others teach and market insides Second Life. Still others mine online games for "virtual gold". And so forth. We have barely even scratched the surface of virtuality. If you want one area to "make a quick buck" this year 2008, I'd say the easiest and fastest is virtual worlds. Study Cyworld in South Korea or Habbo Hotel, or Flirtomatic in the UK and get into this opportunity. As we reported, Flirtomatic has become one of Britain's largest florists - selling 3.5 virtual roses last year and earning 1.6 million dollars in the process.
User-Generation. Something else that the internet brought about was the convenience for user-generated content. It was certainly possible prior to the internet, in an analogue world as countless amateour photographers, freelance journalists etc can attest. But the concept of user-generated content as a mass market opportunity certainly only emerged in this decade. Now we have our videos up on YouTube and commercially viable news sources supported by citizen journalism as invented by Mr Oh and his Ohmy News in South Korea only a couple of years ago.
Before digital tools and the internet it was not practical to get user-generated content published. But today you can put your pictures on Flickr, or if you're a rock band, you can use MySpace to spread your music, etc. YouTube was quickly adapated and improved by SeeMeTV where users get paid for whenever anyone views their content and then that idea taken again further by MyNuMo where users can create almost any kind of digital content from horoscopes and games to puzzles, cartoons and videogames; and then get a revenue-share of it when it is consumed.
We are witnessing a dramatic shift in consumption of content. Young generations are moving away from over-produced content from Hollywood and the big studios and broadcasters. They want to co-create and participate and they value user-generated content. Not necessarily as better (some do think so), but certainly equally viable. I personally don't want to see the kitten playing the piano on YouTube but I'm certainly much too old to associate with this trend. Don't expect this to be a fad, we will find user-generated content spreading ever further. Nike already allows you to design your own shoes. Soon it will be almost anything, which is at some stage in digital form, that will then find an opportunity to let users adjust it, fine-tune, it, or even design in.
Collaboration. A closely related trend is that of collaboration. But its not the same. I can do user-generated stuff all by myself, without collaboration, say posting my picture to Flickr. Or I can collaborate with no user-generation on my part, such as giving my rating of five stars for a book on Amazon. Again, mankind has always collaborated. Man is a social being. Even in caveman's times, a herd or tribe of people would send the men out with spears to hunt the tiger etc. But now digital tools and the internet protocol allow us to collaborate in totally unprecedented scale. Blogs. Wikis. Open Source software. Etc. So digital collaboration is a phenomenon that is about 10 years of age. But there is also the voting and rating part. Young people expect to give their opionion, find value in doing that. So they go to an Amazon page with 800 reviews of a movie, and still give it their own 4 stars, even though that review will not move the average score at all, and nobody is likely to read all 800 reviews. And then there is Pop Idol. We've seen three of the biggest voting events on the planet in the latest runs of American Idol, Indian Idol and China Idol. What of the future? Collaboration will expand almost exponentially.
Mobility. And we want it all with us. Mobility kind of started with the horse or perhaps with the automobile, but these were other large items that moved us around. The idea to move our gadgets and toys around with us, really started as a mass market proposition with the transistor radio of the 1960s. Since then we've started to carry our music around (Walkman), we wanted our personal computer to be portable (laptop) and now our phones (mobile phone) and our digital cameras (cameraphone). Obviously today's smartphone often has also the built-in FM radio and MP3 player and does many of the functions of our laptop.
We have many concurrent themes and trends to mobility. Through miniaturization our laptops get ever smaller and lighter and easier to carry. Our wireless connectivity is gaining distance from the infra-red to WiFi and now to WiMax. The portable phone went from cordless phones of the 1980s to cellular (mobile) phones of today. The important point is that we don't want compromise on mobility. If there is a 3G or 3.5G mobile solution (say a data card to our laptop, or a high end smartphone) then we really don't want the limitations of the WiFi or WiMax solution. It doesn't mean there isn't an opportunity, but just that mobility trumps higher speeds or lower costs. We are lazy bastards and the more we can build those functionalities into our mobile phones, the more we will consume whatever is on them. It doesn't mean that we will all stop using our laptops and shift our internet surfing to the smartphone of today, but it does mean that the trend is away from mobility-limited solutions (desktop, laptop) to more mobile ones, especially the mobile phone.
Richer Content. Then we have a trend to richer content. I mean high definition TV and 3D movies and so forth. Note that this is somewhat in contrast to the earlier trend of miniaturization that I mentioned. We want larger screens on our laptops and especially now after the iPhone, we want larger screens on our phones. The DVD industry is fighting it out between Blue Ray and HD DVD. But this migration to richer content is almost as old as media content itself. Books and newspapers started to add illustrations and pictures in black-and-white. Movies shifted to colour and sound. TV went to colour. Magazines and newspapers added colour. Radio went stereo and HiFi. Movies added dolby sound. Then we had to replace our VHS movie collection with DVDs. TV went digital and now High Definition. Movies went digital and now are going 3D. And so it goes. Don't think it will end here. I notice those "old person's thoughts" to myself, thinking that since I already have my fave movies on DVD, why should I now go out and buy the more expensive versions on Blue Ray or HD DVD but I know eventually I will succumb and even if not all of this current movie collection, probably I will replace some of my dearest content - the James Bond movies for example - and eventually when they are the norm, the new movies will be cheaper on the high definition formats than on DVDs, just like happened with vinyl records and CDs, and VHS vs DVD movies.
Higher Speed. Which brings me to the last of the ten trends, ever higher speeds. Yes, man has pursued faster speeds from Brunel's Great Western Railroad (the first to exceed the speed of nature, his trains achieving ground speeds faster than a speeding cheetah) of the 1800s to steam ships, automobiles, airplanes, catamarans, jet planes, rockets. But we also see the increased speeds in the digital world. Once the internet connected at 2400 baud. Eventually 28.8 speed modems were top speeds. Then we had ISDN lines and then came "the ultimate" high speed, broadband. Well, today most operators offer high speed broadband, typically in the 20 Mbit/s speed range and in advanced countries like Hong Kong, Japan, South Korea 100 MBit/s is the norm. South Korea is already offering experimental connections at gigabit broadband speeds and are planning even faster speeds. The same is happening in other areas. Mobile phones offer 2.5G/2.8G speeds in almost all networks (GPRS, EDGE, CDMA2000 1x RTT) but faster speeds of 3G are used by over 10% (WCDMA/UMTS, CDMA EV-DO) of all mobile phone subscribers and 3.5G speeds (HSDPA) are being rolled out in most industrialized countries.
Do we need the speed? Of course we do. Just look at the previous trends that I mentioned. Richer content? If we move from DVD quality to high definition video, then yes, it will consume much more bandwidth: needs more speed. As we move to ever more 3D realism, then again the bandwidth needs increase. User-generated content? Its no longer the lousy VGA quality cameraphone that the kid uses to upload a picture to Flickr, now the kid's latest cameraphone is a 3 megapixel cameraphone, again more load.
So that is what I had on my mind the past few days. We have these ten trends, they are inter-twined, and they all impact media, advertising, banking, business, travel, education, government, life. There are more trends, for sure, robotics, green technologies etc, but I think these ten are a "cluster" of trends if you will, which all impact each other. And with most of them, I think most business executives today are under-estimating their individual importance. And more importantly, few managers actually notice all ten, and how closely they all impact each other.
So with that, Happy New Year for 2008. We'll bring more news and thoughts for you this year at this blog, please keep reading it.
It is so fascinating to look back to the 1980s (which seem like yesterday to me) and compare the technological advances. It is almost impossible to think what it would be like to go back to a time without messaging, mobile phones and user-generated content. It sends shivers down my spine to just think of it.
Posted by: Kim Dushinski | January 04, 2008 at 10:57 PM
Did people walk around with fax machines in their pocket? I can remember running on too many occasions to the post office to get the last post, now when did I last do that?
Thanks for dropping by Kim
Alan
Posted by: Alan moore | January 07, 2008 at 06:43 PM
Great post, a fun trip down the memory lane and good food for though for the future.
Indeed, none of these developments will stop where they are now even though it'd be tempting to think along the lines that "Well Blu-ray discs will be enough for ever". Still, on many fronts, we will hit either or both the law of diminishing returns and the laws of physics - the development will inevitably slow down. For example, optics already places hard limits on the resolution of cameras - adding over 5 megapixels to a cameraphone or over 8 to a compact digital camera will degrade image quality, not improve it. On DSLR-level, the limit may be around 20-30MP and even that requires very expensive and large top-of-the-line optics.
Similar effects will take place on other fronts; cellphone power consumption cannot increase past 3W before heat dissipation becomes a serious issue. Increased communication may soon hit the fact that there are only 24 hours in a day - and that figure doesn't seem likely to increase :)
And one more point about digitalization; the digitalization of everything has tremendous positive potential to everyone - all of our information and data will be readily available, anywhere, from any device. However, it also places big demands on the providers of those services - namely all that data needs to be backed up. Without extremely easy (and even automatic) back-up services, it becomes dangerously easy to forever lose all ones once-physical memories (music, precious photos, videos etc) to one catastrophic hard disk failure.
Posted by: Sami | January 08, 2008 at 11:19 AM
Good post. We are reading you every day. Keep it up!
Posted by: Javier Marti | January 08, 2008 at 11:04 PM
Hi Kim, Alan, Sami and Javier
Thank you for the comments
Kim - ha ha, good point. There are many technologies that are "nice to have" but I honestly cannot imagine being productive without access to Google, using my laptop, and having immediate access to my close colleagues via SMS texting...
Alan - I remember "wanting" the feature of the fax on the first Nokia Communicator, to have in my pocket the ability to send and receive faxes. Then when I did get my first Communicator, I found that I used the fax feature perhaps three times in total during the several years that I owned that device. On my later Communicators I haven't sent or received one fax ha-ha. How fast these things change..
Sami - very good points. I do think we will find diminishing returns on many technological frontiers. Consider trains. They achieved 50 miles per hour (80 km/h) in 1840. Today normal trains - I mean excluding the high speed bullet trains like Shinkansen in Japan and Eurostar in Europe - tend to operate in the roughly 100 km top speed (65 miles per hour) range. Those were normal operating speeds for trains a hundred years earlier. Yes, it was possible - and is possible - to increase railroad speeds but if its a local train making stops at the various local stops in the suburbs, we don't need the theoretical super speeds..
I am particularly concerned personally about that power issue with mobile phones that you mention, Sami. Obviously my personal interest - and roots - are from mobile phones and thus they are very near to my heart (also literally, with one of my two smartphones always carried phones in the inside breast pocket of my suits). I like to try to imagine near future evolutions for the phone and its services, but increasingly we are crashing into the power issues. That also means battery power and related concerns about explosive and bursting-into-flames batteries as they saw a lot in the laptop industry last year.
And your last point - the value of our stored memories and what if the phone or device is damaged and we lose that information - is a growing concern. To me it seems like the "obvious" service opportunity for mobile operators and their 3G networks but so far it hasn't turned into a major service concept of meaningful market success, yet. Maybe this year, ha-ha..
Javier - thank you so much. We appreciate it that you are reading.
Thanks for writing
Tomi Ahonen :-)
Posted by: Tomi T Ahonen | January 10, 2008 at 04:24 AM
Tomi, the portable power issue is definitely one tough nut to crack. Battery capacity hasn't improved nearly as fast as consumption has increased (reminds me of the computer-related quip that "software gets slower faster than hardware gets faster" :).
But for the sake of the argument, let's say it'll be possible to have 100x the power in equivalent-sized batteries ten years from now. But would they then be too powerful? Consider what kind of damage that battery could do if - and, unfortunately inevitably WHEN - one malfunctions. Have you seen Terminator 3? I personally am not looking forward to seeing the first news story of a downed plane or a derailed train due to someones phone exploding.. :\
Then take this thinking one step further; we might have electric cars that run 1,000 or 10,000 miles on a single charge - or, alternatively, wipe out a city block if you short them.
(Think of what it'd do to your breast pocket, too - might even ruin the suit ;)
Posted by: Sami | January 11, 2008 at 09:57 AM
Hi Sami
Always good thinking from you, thanks. Yes, that is an alarming vision of the near future, yet something like that is bound to be coming, not only with the phones, obviously, but also with cars etc. Those exploding laptop batteries last year did cause many in our industry to stop and think..
Thanks for writing
Tomi :-)
Posted by: Tomi T Ahonen | January 16, 2008 at 09:56 AM
Experts have talked about this before. How many times have you read about the importance of ‘adding value’ for your audience? How many times have you read about ‘building trust’ with your readers/prospects?
Many, many times. You know it well. Every marketing guru has spoken about this topic. I’m sick of hearing it. But it STILL bears repeating.
LATEST TREND
Posted by: david baer | December 28, 2009 at 11:15 AM
Having been a part of the Online Universal Work Marketing team for 4 months now, I’m thankful for my fellow team members who have patiently shown me the ropes along the way and made me feel welcome
www.onlineuniversalwork.com
Posted by: charlesbrooks | February 04, 2010 at 01:05 PM