We stitch together a technology forecast based upon several news snippets.
It’s a conscious decision for me to pull my head out of the technology headlines of RSS feeds, embedded Newsletters, and various analyst reports. In fact, sometimes I read the broader media just to follow politics (Yikes! Why bother.), local news (it’s always grim), and financial minutia. For the latter, I turn to FORTUNE Magazine—for which I actually pay real money.
It turns out that U.S. productivity is slowing, according to the article “We Were Promised a 20-Hour Workweek.” Since 2010 our productivity—output per labor hour—is up by only 0.5 percent per year, per the U.S. Bureau of Labor Statistics. This is bad, especially since it is usually 1.6% (1974 – 1994) or 2.8% (1995 – 2004). Productivity is a function of either lower labor costs (the denominator) or higher output (numerator). Technology can affect both numbers.
Higher productivity (output) has historically been driven by increases wrought by technology, either by improving the work itself or by creating new industries that created new work. Think steam engine, railroads, industrial revolution, electricity, automobiles, women in the workforce, PCs, The Internet and smartphones.
Check the stats on the last three and while the Internet grows each year, it’s building out slowly into lesser-known and often primitive societies with little money to spend. PCs and smartphones? Flat, baby. So on the demand side, we see that demand for technology is down. Thin demand means tech isn’t working to increase productivity all that much.
On the other side of the coin, we can also see that technology supply is also down. It makes sense…no demand means no supply, unless the stuff is being stockpiled someplace in warehouses. According to a Gartner statement in April 2016, worldwide semiconductor revenues declined 0.6% in 2016. Worrisome, but it’s only April. But the news is worse: this decline is on track to be the second year in a row, following 2015’s 2.3% decline.
So accept that both technology supply and demand are down, and this affects productivity.
Is the root of this a complete failure on the part of tech companies to come up with some “next big thing”? I believe that indeed is the case. We’ve gone from PCs to smartphones to tablets…and now we’re onward to incremental improvements in each of these. Ultrabook/2:1s/convertibles; larger-screen “phablet” smartphones; thinner PCs and Macs with better processors; and in the case of Windows, touchscreen machines (come on, Apple…give us a touchscreen or an external mouse on an iPad Pro!).
My point? What’s the next great technology product or disruptive thingy waiting in the wings that can increase productivity output?
Cue the Music: IoT to the Rescue?
Experts, journalists and pundits (like me) point to the 20B-50B Internet of Things (IoT) doodads that are “out there.” We have smart homes on the horizon, and I like (not love) my Next thermostat. Self-driving, V2V/V2I (vehicle-to-vehicle/infrastructure) cars might foment something disruptive by saving lives (more workers, less insurance cost) or reducing commute time so workers can be at their desks more. This would increase the numerator (productivity) and denominator (tech demand). In fact, the IoT might revolutionize lots of things in our world.
Steve Case, former CEO of AOL and clearly a Guru when it comes to technology revolutions, believes the third wave of the Internet will soon be upon us. In a FORTUNE article entitled “Steve Case Wants Tech to Love the Government” he forecasts the Internet as being “more seamlessly and pervasively in every aspect of our lives.” This, in fact, is the promise of the IoT.
Yet I’m not ready to buy it all yet. As friend and colleague Ray Alderman, CEO of VITA, recently pointed out to me: a lot of the innovation in technology lately is in software and apps. These (usually) cost little to build but often don’t create major disruptive market changes. Will the next version of Word change your life? How about that Evernote update, or Adobe moving to a cloud-based model? Not even the radical change in CRM wrought by SalesForce.com caused all the salespeople of the free world to sing praise and meet their quotas.
So after a lunchtime reading roundup of the aforementioned stories and headlines, my conclusion is this: we’re slowing down, folks. I’m afraid corporate profits, the stock market, wages, and unemployment are all watching carefully.
Or…we could wait for tomorrow’s news. There’s bound to be a different conclusion to be reached.