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Thread: Tech disruption - a business perspective

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    Blogger Bernard Murphy's Avatar
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    Tech disruption - a business perspective

    From inside our tech bubble it is easy to believe that robots and AI will take over the world, all brick and mortar retail will disappear, none of us will have jobs and that these changes are inevitable and accelerating.

    Then again, not everyone sees reality the way we do. The Economist has published an article on this topic from a business/markets perspective and sees the relentless march of universal disruption as rather less inevitable than we do. A reminder perhaps that we all need to step outside the bubble from time to time.

    https://www.economist.com/news/busin...-little-impact

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    Bernard, I have been reading the Economist for over forty years and consider it a must read. My only subscriptions are to MIT Technology Review, the Economist and Barron's. I now live and breath economics and the relationships with technology and the world, this is how I make my living.

    I can't predict how disruption will take place and it's ultimate impact, that's what disruption is all about. I can pick the key players though who make the tools that will enable it to a surprising degree of accuracy. Sometimes you have to buy the entire process, like I have done with holdings of AMAT and TSM. Other times I make assumptions like on the automata computing with Micron (they spun it off into Natural Intelligence, I feel for secrecy and the fact that it takes a totally different mind set). With Micron, even if they don't ever bring the automata online, just following that path will yield disruption in their thinking and products. With TSM, they are an aggregator of a variety of disruptive technologies for others to apply. AMAT of all companies is the one I feel owns the future, because no matter what happens, they will be one of the key tool builders to make it happen. Mazda with their compression ignition gas engine will be a minor/temporary disruptor of auto engines for a while with a 30% efficiency gain in one shot. Disruption can be many small advances that before you know it has changed/disrupted everything. The smart phone has disrupted everything, but crept up on us over about fifteen years and is built on the foundation of the cell phone which alone caused disruption. Disruption most times takes place in slow motion, but this is now picking up speed at a frantic rate which I call "The Great Acceleration".
    This is causing disruption in that most people and companies can't comprehend or keep up with it and this is the greatest challenge we face in the future. Let's just hope some maniac isn't the first to see and utilize a great disruptor first. Thoughts and comments appreciated.

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    Blogger Bernard Murphy's Avatar
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    Thanks Arthur - totally agree on Economist among a few others being must-reads. Agreed also it is a guessing game, careful study yielding clues to where disruption will happen. Agreed also that financial measures are the best way ultimately to score what really happened. What struck me about this article was the general observation that markets aren't betting on major secular shifts. Company by company they look for winners and losers as markets always do and certainly some of the brick and mortar stocks are down thanks to Amazon. But there's no evident bet that it's all over for conventional stores. Reminds me of the hype around renewables replacing all other sources of electricity (I'm a renewables fan BTW). Giant shifts are economically improbable, at least in our lifetimes.

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    Bernard, what do you consider your other must reads? I know they must be good.

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    Quote Originally Posted by Bernard Murphy View Post
    Then again, not everyone sees reality the way we do. The Economist has published an article on this topic from a business/markets perspective and sees the relentless march of universal disruption as rather less inevitable than we do. A reminder perhaps that we all need to step outside the bubble from time to time.

    https://www.economist.com/news/busin...-little-impact
    My worry is not that there won't be companies anymore that can make money due to digitization. I'm sure there a lot of smart, well lead companies that are able to adapt to new market conditions.
    My worry is if the generated wealth will be a gain for all people or just for the happy few and this does not seem to be handled in the linked article. There is no consensus among economist on this and if you talk to three of them you likely get four or more opinions. Unfortunately we will likely only be able to conclude in this in hindsight, e.g. when all has happened and is behind us. To me there are some warning signs like that latest recovery after the crisis did not seem to include the same recovery of wages as after previous crises.

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    Trust me ...
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    Blogger Bernard Murphy's Avatar
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    An eclectic mix Arthur. In addition to the Economist, Reuters for news (aiming for middle of the road), Communications of the ACM for computing, Nature Physics since I'm a physicist (though thinking of replacing that with Scientific American or New Scientist or similar), Physics Today for similar reasons, and a range of books in life sciences, physics math and music. Currently Behave by Robert Sapolsky

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    Quote Originally Posted by Staf_Verhaegen View Post
    My worry is not that there won't be companies anymore that can make money due to digitization. I'm sure there a lot of smart, well lead companies that are able to adapt to new market conditions.
    My worry is if the generated wealth will be a gain for all people or just for the happy few and this does not seem to be handled in the linked article. There is no consensus among economist on this and if you talk to three of them you likely get four or more opinions. Unfortunately we will likely only be able to conclude in this in hindsight, e.g. when all has happened and is behind us. To me there are some warning signs like that latest recovery after the crisis did not seem to include the same recovery of wages as after previous crises.
    Welcome back Staf! On 3 economists having 4 opinions, it was ever so. And in the larger picture to which you point, indeed forces far more powerful than tech seem to be shaping our world today - concentration of wealth and populism to name only two. I try looking at history to see if there might be indicators (as a species we tend to repeat our mistakes). Are we building towards another WWI? I wish I knew

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    Bernard, I also read online daily Forbes, Bloomberg, Popular Science, Popular Mechanics, NewAtlas(covers the world's technical journals) plus I never hesitate to Google anything of interest.

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    Ditto on Google Arthur though of course there's always a challenge with the reliability of the source

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