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Why empowr (Part 13)

Why empowr (Part 13)

by Johnny Cash on March 12, 2017

Why empowr (Part 13)


Hello everyone,
Together, we've been reading the Why empowr book, written by one of the empowr founders. 
If you're interested in why empowr was created, or want to know where it's headed, this is a good way to find out. 

As always, many thanks for your thoughtful comments that you left in the earlier parts; we're all reading your comments very carefully.


The world's experiencing problems 
that threaten humanity's future 

Yet, as a result of setbacks with democracy, education, and technology, many countries are being governed very ineffectively, and voters are either too uneducated or too worried about providing for their families to do anything about it. This is making it much harder for the world community to effectuate the changes that are needed to avoid catastrophe.
Between climate change, terrorism, technological unemployment, pandemics, economic collapses, natural disasters, and growing first-world inequality, there are some very serious issues facing our species that require equally serious solutions. 

So, to summarize the bad news covered in the first half of this book:
●      First-world democracies are being hijacked by special interests and big money;
●      Educational systems are leaving students woefully unprepared to participate in the modern, global economy where only highly skilled labor jobs matter, as software and automation replace low skill jobs;
●      Network technologies are making it much easier for single corporations to rapidly take over entire industries and form job destroying monopolies;
●      To add insult to injury, each structural problem is making the others even worse, leaving the human race completely unequipped to face the many complex threats facing humanity.

I understand if you winced a little while reading all that; it wasn’t particularly fun writing it, either. That said, in the interest of clarity, I’d like to elaborate just a little on these points before moving forward to examine what we believe are the most dangerous global problems. I promise I’ll make it fast.
First, the hijacking of democracy has left the governments of many influential countries unable or unwilling to respond to the worldwide issues humanity must deal with. As a species, we’re facing challenges that very clearly require visionary leadership and innovative thinking to address them comprehensively.
At the same time, because of the erosion of democracy in leading countries such as the United States, the governments that would be most able to push forward international efforts to meet these global challenges are being held back by utterly dysfunctional political systems. As the world watches this dysfunction unfold, global enthusiasm for democracy wanes, and other more dangerous forms of government (which we’ll discuss later) become more appealing. This puts humanity in danger of backsliding.
               Why empowr (Part 13)
Meanwhile, many educational systems are failing to give students the skills they need to succeed in the post-industrial workforce and become productive members of society.
Even as secondary and postsecondary education becomes more important to prosperity, underfunded schools are forced to hire teachers from the bottom half of graduating classes. Those teachers go on to inadequately educate their students, many of whom eventually go on to become the next generation of teachers. As this happens, a “dumbification cycle” is created which produces consistently less capable graduates each time the cycle repeats. Consequently, students around the world are expressing their frustration with schools they see as having wasted years of their life, actually sabotaging their chances of success rather than enhancing them.
               Why empowr (Part 13) 
Next, while democracy and education falter, the Network Effect threatens to create behemoth global corporations that monopolize entire fields. As these tech-heavy companies evolve, they shed their human assets in favor of more efficient robotic workers. This leads to unemployment, which shrinks the middle class, concentrating wealth and political power at the top to an even greater degree.
               Why empowr (Part 13) 
These social, political, and economic structural problems are putting many of the world’s most powerful countries in a position where they aren’t equipped to deal with important crises, e.g., climate change, government shutdowns, the expansion of international terror networks, and the global spread of drug resistant diseases, to name but a few.
There are other examples:
●      We are still exploring new fossil fuel resources even though our top scientists tell us that our burning of the many fossil fuels we have already extracted will cause irreversible global catastrophe.
●      Major political parties across the world are becoming more polarized each year, as each election cycle pushes them further away from the center.
●      Rather than find ways to properly integrate disaffected segments of society, many countries are choosing to go down dangerous, authoritarian paths in order to feel secure against global terror.
●      Despite their role in creating superbugs, antibiotics are still one of the most over-prescribed medications in the world, leading to more resilient and deadly diseases every year.

And, while all the problems discussed in this chapter are real and require serious attention, there are three core problems that worry us, at empowr, the most (and for which we’ve spent the last decade and a half working on solutions):
●      Poverty and inequality
●      Terrorism and extremism; and
●      The backsliding and destruction of democracy.

The growing dangers of poverty and inequality
At first glance, statistics show that poverty and inequality may be problems that are shrinking at a rapid rate. However, in large part because of China’s unsustainable economic growth, assessing either statistic on a global level is misleading.
The fact is that inequality in industrialized nations grows worse every year, and, when China is excluded from measures of global poverty, the problem seems barely to have been addressed by some of the world’s poorest regions.
This should concern everybody because both issues, historically, have had some very nasty consequences. 

In recent years, leaders around the world have been patting themselves on the back over the perceived progress in the global fight against poverty. And, to their credit, a few aspects of worldwide poverty are being addressed in some noteworthy ways: for example, the global childhood mortality rate has fallen by nearly 50% since 1990; pregnant women in many poorer countries are receiving improved prenatal care. On the surface, even the overarching problem of global poverty itself appears to have been addressed meaningfully in the past two decades, with the poverty rate falling 25%-30% since 1981.
Unfortunately, a more detailed examination of the poverty numbers shows that China accounts for the vast majority of the reduction in global poverty. This is largely due to the huge trade surplus China has been running for the past decade, with industrialized nations pumping tens of billions of dollars into its economy every year.
Without China, improvements in global poverty have been mediocre at best, with only a dismal 5%-10% reduction over the course of the past two decades contrasted with huge advancements in technology and the continued march of globalization. Adding insult to injury, in a number of critical regions, the number of people living in poverty has actually increased in recent years, with sub-Saharan Africa being among the most worrisome.
              Why empowr (Part 13)
Worse, as I’ll discuss in greater detail later on, China’s current economic model is simply not sustainable in the long term. The impact that the shrinking of China’s trade surplus will have within its own borders and on the global poverty numbers is not certain. But, as democratic reforms are slowly rolled back within that country, as income inequality grows (now even exceeding U.S. numbers), as a monstrous real estate bubble prepares to burst, and as some minority populations become further disenfranchised every year, many global authorities have begun to express a great deal of concern.

Inequality is a growing problem for the world's most powerful and influential nations
Even though inequality has been “reduced” on a global level, rising rates of inequality in the world’s most powerful countries threaten everything from the effectiveness and desirability of democracy to the very stability of the global economy. Worldwide inequality has fallen as wealth from industrialized nations and their post-industrial economies has been pumped into developing countries, due in large part to the availability of cheap manufacturing labor within those countries. Despite this phenomenon, many first-world nations are being forced to come to terms with the issues created by increased economic inequality within their own borders.
The United States is perhaps the best example of the threat posed by this growing first-world inequality. The percentage of national wealth controlled by the top 1% of American society has skyrocketed since 1980. While the share of U.S. income going to the top 1% of earners has jumped over the past half century, America’s middle-class has seen its income growth stagnate, and some of the poorest segments of society have seen their standards of living actually fall. Currently, over 45 million Americans and nearly one out of every five American children live in poverty.
              Why empowr (Part 13)
This doesn’t just pose an enormous credibility and public relations problem for a country that has been selling the American Dream to the world for the past century. As inequality grows, so do a number of very severe problems, such as declining social mobility, decreased political stability, a less healthy population, reduced child well-being, increased prevalence of mental illness, rising prison populations, and lower educational scores, to name just a few. The damage that inequality is causing to the very fabric of society in a number of industrialized nations comes as no surprise to many historians and prominent public figures who, for years, have been warning of the dangers that inequality poses to our world.
The upshot of these two growing problems is that the gains that have been made in first-world nations since the end of World War II are being threatened by the very issues they committed to addressing in other developing and third-world nations back in the 1990s. The irony of this situation could be humorous, if not for the fact that poverty and inequality have led to revolutions or even worse, over the course of human history.

Why empowr (Part 12)

by Johnny Cash on March 05, 2017

Why empowr (Part 12)


Hello everyone,
Together, we've been reading the Why empowr book, written by one of the empowr founders. 
If you're interested in why empowr was created, or want to know where it's headed, this is a good way to find out. 

As always, many thanks for your thoughtful comments that you left in the earlier parts; we're all reading your comments very carefully.

 

The Dark Side of Network Technology

The free exchange of information that network technology has brought about has also led to a winner-take-all marketplace where the first business to effectively leverage the cloud by going online and taking advantage of “The Network Effect” ends up dominating each field. This has already created huge, shockingly powerful monopolies that stifle competition and innovation in addition to reduce the number of jobs available in a given field.
 
In the future, as more businesses become fully networked, it is likely that each major category of business will end up utterly controlled by one monstrously influential global corporation. This in turn will concentrate obscene wealth and political power in the hands of a small, elite group, while leaving huge swaths of humanity unemployed and disenfranchised. Unless... 

Five months.
That’s all it took to block an industry giant from gaining control of the entire Japanese market.
Yahoo had lusted after the Japanese auction market for a long time, while planning its strategy of attack. Despite a great deal of skepticism on whether the Japanese would even be interested in online auctions, Yahoo assigned four of their best people to develop the site. At the same time, the leading force in the online auction industry, eBay, was also plotting its entry into the Japanese market. As the development teams in each company worked at a feverish pace, everybody knew that the first player on the scene would have a distinct advantage.
In September 1999, Yahoo Japan launched its auction site, beating eBay to the market by only five months. This advantage, combined with marketing tactics that skillfully targeted new Japanese users, resulted in Yahoo Japan’s essentially completely shutting eBay out of the Japanese market and laying claim to the tens of millions of dollars in revenue that the market produced each year. When the CEO of Yahoo Japan, Masahiro Inoue, was asked why being first to the market was so critical, he answered, “We knew catching up with a front-runner is hard because, in auctions, more buyers bring more sellers.”
The principal that Mr. Inoue stated above, often referred to as the “first-mover advantage,” is one that applies far beyond the online auction market. Being the first to successfully enter a market has always been important to business. But with the introduction of network technology, the importance of being the “first mover” has been elevated to existential levels for businesses.
This is to a large degree a result of the fact that Mr. Inoue states very clearly: more buyers bring more sellers who, in turn, attract more buyers, creating an upward-accelerating phenomenon that means, within only a few months, competitors to that first-mover platform find it nearly impossible to enter the market or survive. Whether discussing online auctions or any other online business, the principle remains the same.
Network technology amplifies the first-mover advantage through something called “The Network Effect.” I can feel readers’ eyes glossing over as I type this, so let me assure you up front that I’m going to keep this explanation as short and sweet as possible.
The Network Effect (also called the Law of Telecosm) essentially states that as more “nodes” (or users) connect to a network, the value of the network (to its customers, shareholders, and other stakeholders) goes up exponentially as opposed to linearly:
              Why empowr (Part 12)

Think of it like this: If, at one point, you owned the only telephone in the world, it would be pretty much useless because there would be nobody else to talk to. But when somebody else gets a telephone, all of a sudden your phone is worth a whole hell of a lot more, because now you have somebody to talk to (other than yourself). As more people and businesses get phones, the value of having a phone goes up, as does the value of the entire telephone network. Eventually, everybody wants and needs a telephone, because there are so many people and businesses to talk to. Like with any type of network, as each new person connects to the network, the value provided by the network goes up exponentially, not linearly.
I’ll give one more quick example, just to make sure you understand. If you already get it (or just plain don’t care), feel free to skip it.
Way back in the days when the operating system field wasn’t completely dominated by the kingdoms of Microsoft and Apple, International Business Machines (IBM) was contending with Microsoft in the personal computer operating system market. Having once been partners on the development of a new operating system called OS/2, the competition between the two companies was particularly fierce. While Microsoft and its operating system, Windows, enjoyed a number of advantages over IBM and OS/2, two key factors led primarily to Microsoft ultimately winning the war:
1.     Microsoft got Windows preloaded on many thousands of personal computers. This put Windows at a distinct advantage over IBM’s OS/2, which had to be purchased separately. 
2.     Because of that, many more software developers began to create programs for Microsoft’s Windows operating system. This meant that users who had Windows gained access to a much greater variety of programs. 
If you look at the two factors individually, they each appear important but not necessarily critical. However, if you put them together, you see how powerful a combination they make: Developers wanted their programs to be bought by as many consumers as possible, and since computers were coming preloaded with Windows, it made more sense for developers to design their programs for Windows machines.
And consumers wanted to be able to use as many programs as possible, so it made sense for them to choose Windows because it had more programs built for it.
The operating system with more programs (Windows) attracted more consumers; and the one with more consumers (Windows) attracted more developers and programs.
Fast forward a couple of decades, through many repeats of this cycle, and now almost nobody knows what OS/2 is or was, but nearly everybody who has ever used a computer knows about Microsoft Windows.
Now, let’s move on to why network technology poses such a frightening long-term threat to humanity.
As more and more companies in every imaginable industry hook up to the Internet and their business models continue to take more advantage of network technologies, the Network Effect becomes a bigger factor in their industry.
At first, when a business begins to experience the Network Effect, it sees increased growth in the value it can provide to customers. This draws more and more customers to the business which, of course, increases revenues. As revenues go through the roof and the business is able to control an increasingly larger share of its market, smart investors in the industry start to see the writing on the wall and begin to divest from its competitors, investing exclusively in the inevitable champion of the winner-takes-all game that’s been set in motion. The value of the networked company continues to increase by leaps and bounds, giving it even more resources, which enable it to provide even more value to customers and take over an even greater share of customers, profits, investors, suppliers and other limited industry resources.
As the business that first leverages the Network Effect takes off into the stratosphere, its competitors soon become unable to raise money because nobody wants to buy their stock. Even worse, it gets harder for competitors to acquire new customers because they can’t provide anywhere near the same value that the fully networked business is able to give. The competitors’ stock prices plummet, they are forced to lay off many employees, and, eventually, each competitor goes out of business, turning the most networked company into a monopoly.
Without competitive pressures pushing them to innovate, monopolies stop progressing. Their products and services remain the same for longer and longer periods. To make their shareholders happy, they easily generate higher and higher profits by incrementally increasing the prices of their stale products and services, which they can easily do because customers have nowhere else to go. Slowly but surely, the entire category of business they dominate stagnates.
While consumers often benefit from the incredible value monopolies initially provide, in the end almost everybody suffers from monopolization. Society misses out on all the product selection, quality, and value that would have existed in a more competitive arena.
Even more importantly, the gradual disappearance of competitors and their associated partners, vendors, and supporting ecosystem means fewer people are required to operate the less robust industry.
Going forward, as all companies continue their rush toward adopting network technologies in order to exploit the Network Effect and win their industry’s coveted monopoly position (before their competitors do), one industry category after another will become dominated by Goliath monopolies, creating more unemployment and underemployment (where people are forced to take low-paying jobs they don’t want).

The Scariest Category of All

One specific industry category that’s creating more unemployment and misery is that of the pure web tech giants. They are taking greatest advantage of the Network Effect because they are nothing if not giant networks. These are the web and social media companies that we’re all quite familiar with: Facebook, Twitter, Tumblr, Instagram, and Pinterest, to name just a few. Google falls under that category, too, because its primary business model is simply a network scheme that brings together businesses looking for customers with customers searching for the things those businesses offer.
As these web models first evolved, consumers, in their haste to take advantage of the services these companies offer, basically failed to say, “Hey, wait a minute. Your entire business model depends on the relationships, communications, and/or searching activity of me and others like me… So where’s my share?” The result is what I like to call the Great Disappearing Act—in that, massive amounts of society’s productivity, progress, innovation, and value are being exchanged for something worth much less.
For those of you who like numbers, let’s take a look at what’s been happening in America, as an example:
The United States, as a nation, spends the equivalent of twelve million work years (a work year is 52 forty-hour work weeks per year) on social media annually, the equivalent of over $300 billion dollars at the average U.S. person’s salary level of $24,000. So, Americans are giving up $300 billion dollars’ worth of their time and receiving virtually nothing of monetary value in exchange. Facebook, the social network that receives most of that time, generated $1.83 billion from its U.S. users in the fourth quarter of 2014.[v] That means that, in America alone, each year we’re exchanging the majority of $300 billion worth of our time for about $7 billion in revenues for Facebook—a disappearing act of 97% for society as a whole.

Extractive vs. Inclusive Economics

One of the many geniuses that has advised empowr, M.I.T.’s professor of economics and one of the ten most cited economists in the world, Daron Acemoglu[vi], wrote a bestselling book titled Why Nations Fail, in which he discusses how most countries were originally set up to extract as much money from their economies as possible for the benefit of a few elite people at the top, leading those nations to fail economically. That’s called extractive economics.
On the other hand, the nations that succeed economically are the ones that figure out how to be inclusive, meaning their policies and institutions are organized in a way to ensure that any value taken out of economies, such as taxes, are intelligently put back into the economy in ways that help further grow their economies and help their people improve their lives.
Many nations, such as Argentina, Peru and Mexico, were originally built by settlers who arrived from more developed countries with a goal of extracting as much value as possible from these new lands, and who turned the locals into slaves, using force to extract natural resources and send those resources back to the kingdoms that financed their missions. Those extractive approaches to economics resulted in widespread misery, economic failure, and cultural norms that, in many cases, still continue to this day.
In many ways, this is what is happening on the web today. In other words, Facebook’s $7 billion in annual revenues (generated from its U.S. territory) and associated profits—generated from nearly $300 billions’ worth of American’s time—ends up going to a tiny number of Facebook’s major shareholders and a small number employees (relative to its user base; only 7,200 employees as of early 2015[vii]). This is exactly the definition of extractive economics, and, as those numbers clearly illustrate, it’s having a damaging effect on the economy of the United States as well as every country in which Facebook operates. And it’s something that must change, or the world will end up in a very bad place soon, as we’ll discuss in the next chapter. (Addressing this problem was a primary reason that empowr was created. Details on exactly how empowr will help, in the chapter titled “Strategically Leveraging the Network Effect.”
“Now, hold on,” some of you will say. “Society benefits from the services that Facebook, Google, and other networks offer to their users for free.”
I agree. But I argue that the economic value of the services offered by these companies for free to their users, pales in relative economic value to that which society loses in the process, as measured, for example, by the $300 billion of worker time that disappeared in the marketplace. In addition, there are no taxes collected on free services; therefore, funding for schools, roads, and other government services disappeared along with all that economic value.
Today’s social networks rate very low in Overall Labor Effectiveness (OLE), a key performance indicator that measures the utilization, performance, and quality of any workforce and its impact on productivity.
If the economic model of current social networks worked well from a macroeconomic perspective, each dollar’s worth of worker time consumed by the network would translate into something greater than one dollar in economic output. And, of course, that output could be taxed, bringing back more to society as a whole.
The good news is that capitalism is great at motivating people to figure out what the best uses of scarce resources are. And that’s why it’s only a matter of time until someone presents a better model than Facebook’s, which sets the bar quite low since it takes each dollar’s worth of labor and shrinks it into a mere three pennies.
At empowr, we’ve taken another approach, and that’s to first carefully study history to discover what happened over centuries within countries, which are the original large social networks, of course.
What we learned from our research and then spent the next fifteen years attempting to implement is the idea of offering an inclusive alternative to users. When America declared its independence and later collected taxes from citizens, those revenues belonged to its citizens, not to a small number of kings, lords, and knights (as was the case in Great Britain, for example). In other words, tax revenues were spent to build roads and bridges, educate citizens, and protect them—all things that helped average everyday citizens to increase their economic output. The result of this inclusive approach (as opposed to an extractive approach) was that America’s share of global GDP shot up more than thirty-fold—from a fraction of 1% to nearly 30%—in just over a single century: 
               Why empowr (Part 12)

Finally, some of you will argue that what people are doing on Facebook should not be viewed as work; rather it’s all just communication—or even entertainment, just like watching TV or listening to the radio.
But is there really any question about whether watching TV for hours each day is good (or ended up being good) for individuals or society as a whole? There’s a very simple but strong correlation that can be drawn between when TV started to take up hours of people’s time each day, and when society started getting dumber, less knowledgeable, and less productive, but let’s not go there right now.
Instead, close your eyes and imagine for a moment that with the help of some new technology, we could turn that very same communication and entertainment into actual economically productive activities—converting each dollar worth of time spent in the platform into something greater than a dollar in economic output—creating opportunity for individuals and progress for society. If that could be accomplished without any loss of communication or entertainment value, would you consider it an important advancement?

Building the world's first inclusive online economy
If corporations can figure out how to be inclusive as opposed to extractive, not only will their customers love them like never before (resulting in more loyal customers who spend more money with them per customer), but they’ll also end up making more profits for their shareholders in the long run—much in the same way that the United States now boasts the largest number of billionaires in the world, and why the U.S. government is the most powerful and wealthiest organization in the world, even though it spends all the tax money it collects on serving its citizens.
Being inclusive as a corporation is much harder than it sounds. First, company shareholders have to be convinced that giving back profits to customers is a sound business decision (for them). empowr decided early on to not bring in investors. Yes, that resulted in varying levels of poverty and misery for about 1,000 employees who (because they believed in empowr’s mission) left high paying jobs to work for little or no pay for some or all of the fifteen years it took to develop the empowr platform. As a result of their sacrifices, empowr is now in the incredibly unique position to adopt an inclusive approach to its economics and distribute its profits to its customers, because it has no Wall Street shareholders or venture capitalists to convince.
Without a doubt, other companies that want to take the same inclusive approach will have a much harder time convincing their stakeholders (shareholders, investors, and board members) to go along. The upshot is that, by being the first to do this, empowr hopes to provide a real live example that other companies can show their investors when they, too, set out to win the argument that inclusive approaches will not only attract more loyal customers and revenues but will ultimately lead to higher profits for shareholders in the long run—in the same way that inclusive countries ultimately created more wealth for everyone involved, including normal citizens AND wealthy stakeholders.
In addition to the hurdles presented by company shareholders, giving back profits to customers requires many new inventions and technologies that can accomplish everything from effectively distributing money to customers, to blocking fraudsters looking to take advantage of those distributions. Luckily, empowr has spent the last fifteen years building virtually all of the required technologies, techniques and know-how, and we intend to give all of these to companies of all types, sizes and industries. We’ll discuss this later in this book.
To be clear, Facebook and Google are hardly alone out there as pure network plays that are effectively killing the economy. Skype (with only 500 employees; 2010) is putting massive phone companies (and their employees) out in the cold, as is Automattic/WordPress (322 employees), WhatsApp (55 employees), Mozilla (1,000 employees), Tumblr (271), Twitter (3900 around the world), Opera Software (1,029), Canonical (500 in 30+ countries), Wikimedia/Wikipedia (250), and Craigslist—which has almost single-handedly put newspapers out of business—has a mere 40-some employees in San Francisco.
In the grand scheme of things, the Internet’s Network Effect is just getting started but is already causing mass unemployment, and that’s on top of unemployment caused by automation coming in to replace workers, such as the ways that software and search engines are replacing travel agents, phone operators, video-rental and record store employees.
Or look at what happened in Detroit, Michigan, where assembly line robots and other forms of automation replaced autoworkers in the car, truck, and automotive parts plants once thriving in the 1950s and ‘60s.
               Why empowr (Part 12) 
Eric Byrnjolfsson, another well-respected American author and academic from M.I.T., described in his book, Race Against the Machine, an exchange between Ford CEO Henry Ford II and United Automobile Workers president Walter Reuther, as they toured a heavily automated automobile factory.
“Ford jokingly jabs at Reuther: “Walter, how are you going to get these robots to pay UAW dues?” Not missing a beat, Reuther responds: “Henry, how are you going to get them to buy your cars?”

The result of all of this is that society’s jobs (that people actually want) are disappearing en masse on the one hand, while, on the other hand, a huge amount of wealth is moving to the tiny, elite parts of society comprised of either owners or essential and highly skilled employees of category-killing monopolies—leading to mass technological unemployment.
             Why empowr (Part 12)
In the coming years, nearly every majoyr industry will become very highly networked and automated
To get an idea of the effect that automation and the Network Effect have already had on your life and on the world, let’s play a little game. Bear with me: I promise I won’t take too long to get to the point.
Think of the last time you bought any type of music. Chances are that many of you either haven’t bought music in a very long time or, if you did, it was purchased or rented through one of the giant online music platforms such as Spotify, Pandora, or iTunes.
Next, try and remember when you last purchased a book and where you purchased it. While there are still plenty of places to purchase books, for the time being, the dominant force in the industry, Amazon, is growing larger and more monopolistic every year.
How about the last time you searched for information? As discussed elsewhere in this book, you probably didn’t grab a dictionary or a sports almanac. You almost certainly didn’t go to your favorite shelf full of encyclopedias or head to your local library. I would bet good money that you probably “Googled” it.
Or think of the last time you watched a movie or a show on anything other than a television. It was likely Netflix, Amazon, or Hulu. You may have even been extra sneaky and watched your movie or show on one of the many illegal sites that new technology has given the ability to broadcast pirated videos across the globe mere hours after they air.
The upshot of all of this is that, in every single scenario above, thousands upon thousands of jobs are being made either obsolete or much less important each year, as technology does more of the work in each industry. With each of the business models above, musicians, writers, website creators, telephone operators, truck drivers, movie creators, and the other everyday people who work in each of those industries receive a smaller share of the profits as time goes by.
As all services eventually become more and more digitized, the owners of the networks (and the servers that run the algorithms) end up with a frightening level of control over their particular industries. And every week, they quietly tweak their algorithms to ensure that, gradually, the vast majority of the revenue their industry produces goes right into their pockets.
We won’t have to wait long to see the next generation of technological unemployment. A report from the University of Oxford recently predicted over a 90% chance that fast food workers will be replaced by machines in relatively short order. Another example is that, thanks in large part to websites like Travelocity, Orbitz, and Expedia, over 38,000 travel agent jobs have disappeared since 2002.
Even soldiers and police officers may someday soon have their jobs taken over by machines. Professionals aren’t safe from being automated into obsolescence or irrelevance, either. Legendary tech venture capitalist Vinod Khosla (someone who was early to understand some of empowr’s promise and goals, as evidenced by his repeated aggressive attempts to buy a piece of empowr) predicts that, in short order, 80% of what doctors currently do will be replaced by robots.
And those are just a few examples. Because of growing technological unemployment and the rapid monopolization of entire industries due to the Network Effect along with deteriorating educational systems and dysfunctional governments, the world is facing some huge challenges and will, undoubtedly, face even bigger challenges in the near future. So, to be perfectly honest, as it stands now, things look pretty grim.
Even “grim” might be a bit too sugar-coated, so I’ll just call it like I see it, instead.hy empowr (Part 11)
by Johnny Cash on March 03, 2017

Why empowr (Part 11)


Hello everyone,
Together, we've been reading the Why empowr book, written by one of the empowr founders. 
If you're interested in why empowr was created, or want to know where it's headed, this is a good way to find out. 

As always, many thanks for your thoughtful comments that you left in the earlier parts; we're all reading your comments very carefully.
Network Technology changed the world

As companies and entire industries have gone online, the world has become a much smaller, more efficient place. Tasks that only a couple of decades ago would have taken hours to complete now take a matter of minutes or even seconds. This increased efficiency has made people’s lives safer, longer, more productive, and, in many ways, more enjoyable.
In addition to all these positive effects, network technology has allowed information to be shared at nearly unimaginable speeds. This free exchange of information is leading to technological advancements that are drastically improving nearly every aspect of our lives. 

There are plenty of people around today who remember a time when international calls were a luxury reserved for special occasions. Back in the mid-20th century, making an international call was a bit of an ordeal. First, you had to leave your nice, warm house and proceed to a telephone office. Once there, you had to grab a card and wait for a phone booth to open up. After that, you had to wait for the operator to connect you to whomever you were calling.
From all accounts, the phone call itself was like shouting into a cave, with your own voice often reverberating back at you from the telephone speaker like a flock of angry bats. The person on the other end of the line was typically so difficult to hear that callers often joked that every long distance phone conversation took place twice in one call, as nearly every sentence had to be repeated at least once.
On top of all this, chances are that the phone company operator was listening in occasionally during the call, so they could disconnect you when the phone call was over. (The grandmother of one of my friends worked as an international switchboard operator, and he says that she has fantastic stories about some of the phone calls she listened to over the years.) Finally, when the call ended, you left your booth and paid a very hefty fee for each minute you’d been on the phone.
Nowadays, there are many different ways to have an international conversation with a friend from the comfort of your couch, using your very own smartphone, tablet, or computer. You can chat with your friend using one of the numerous chat services like Google Talk or Facebook chat, text your buddy instantly using the text feature included on every phone since the 90s, call your friend using your phone’s regular dialing feature, or even use Skype, Google Voice, or any of the other freely available VOIP international calling services.
In addition to having your pick of services, you can also have every one of these conversations with little to no call interference and nobody listening in (except for maybe the United States’ and/or your own country’s National Security Agency). Best of all, many international calls can be made completely free of charge. International calls are just one small example of how network technology has changed an industry. Here are a few more examples that come to mind.

Networked Technologies are Optimizing Humanity

Think back to a time before Google, if you can. Imagine that you needed to find a piece of information. This information could have been an answer to a question about the world or perhaps the name and location of a store that carried a product you needed. Chances are that, to answer the question, you had to consult an encyclopedia or do something really drastic, like ask another human being. To find the store, you might have checked the local phone book.
Now, think about trying to find absolutely any information, product, or service today. Where would you go first? Personally, I’d type whatever it is that I’m looking for into the built-in search box on my internet browser, and Google would probably find exactly what I’m looking for and put it on the very first search page. This process gets more efficient every day since Google’s algorithms and access to content are second to none. Consequently, a search that would have taken minutes twenty years ago (or even hours, for harder to answer questions and harder to find products) is now completed in a matter of seconds with a much higher chance of success.
Next, let’s think about how you used to buy books (and many other items frequently purchased, nowadays). If your friend told you about a really great book by their favorite author and said that you absolutely had to read it, where would you go to get it? Well, if you were particularly frugal, you might go down to the public library and see if the book was available to check out.
Otherwise, if you wanted to buy the book for yourself, you would have to call the local bookstores to see who had it in stock and then go to purchase it. Alternatively, if, after all this calling around, none of the local book stores had it, you’d have to ask them to order it. This process sometimes took weeks, depending on the popularity of the book. Once the book arrived, they’d call you, and you’d have to drive down to the bookstore to pick it up.
If you want to buy a book today (almost regardless of how hard it is to find), all you need to do is type its name into the search box on Amazon’s website, buy the book online, and, if you’re an Amazon Prime member (which you should be; it’s a great service), you’ll probably have it delivered right to your door within a couple of days or be able to download it instantly to a digital device of your choosing (my personal preference). Even if you’re not a Prime member, you’ll still probably get your book delivered to you in less than a week.
Am I starting to paint a picture for you of how much things have actually changed? Great. Then one more example for good measure won’t hurt. I promise it will be an interesting one.
Let’s say, twenty years ago, you wanted to have a big party one weekend. Imagine that you hadn’t seen a bunch of your friends in a very long time, so you decided to invite all of them to this party and make it a really fancy affair: catering, open bar (because you’re classy like that), the whole nine yards. First, you’d have to figure out which of your friends you actually liked enough to invite to your awesome party. You might search through your contact book and find the people you most wanted to see. After that, you’d search the yellow pages for a venue, call around town to find the right caterer, and then put together invitations and mail them out. If you were lucky or really efficient, preparing for your party would probably end up, at the very least, taking a couple of days.
Now, imagine the exact same party today. You invite all your Facebook friends from your “People I Actually Like” list with a few clicks; search Yelp for a caterer; find and reserve the best venue on Google; and the entire process could be over in a matter of minutes. I’ve already covered Google a bit, but no discussion of how network technology has changed our lives would be complete without touching on the dominant social media platform of our time… Facebook.
While people like to complain about Facebook, sometimes for valid reasons, nobody can argue that it hasn’t revolutionized how people build and maintain their network of friends. It’s even redefined the word “friend.” (A common question today being, “Is he just your Facebook friend or your real-life friend?”) And, despite complaints, a lot folks’ lives have been changed for the better because they are a part of Facebook.
In any case, the real point of this last scenario is to show how an activity that, just a few years ago, would have taken a lot of time and energy to complete could possibly take you just minutes to throw together today. Now, multiply all that saved time billions of times over by the many millions of different people who repeatedly use these services, and you start to get an idea of how big an impact network technology has had across the globe.
Finally, look at everything I’ve written about in this chapter. Twenty years ago, to accomplish all the tasks mentioned, you would have needed an encyclopedia set, a phone book, a clunky old non-portable telephone, transportation to visit physical locations, and a ton of patience. Now, consider how every single thing discussed above can be taken care of from the computer in your home today or on the smartphone in your pocket. And none of these stories even touch on the astonishing benefits that network technology has given to research and development, and has given in support of new technologies across every single profession and field.
To wrap up this chapter, I’ll ask you to think about one more thing and then I swear, I’ll move on. All the stuff we’ve talked about so far has pertained primarily to information-oriented tasks, services, and businesses. At the very least, all the physical items being looked for were small and portable. This lack of physical collateral means that a lot of the businesses discussed were either made in the Internet “cloud” or changed fairly easily to leverage the benefits of the cloud.
But, as network technology has evolved, even businesses with significant physical collateral like hotels, taxi services, and airlines (to name just a few) have started to move the majority of their business online to take advantage of the cloud. This trend will someday result in every single product and service that people want being delivered to a physical location of their choosing, based on a request they make from an electronic device they carry with them probably twenty-four hours a day. The future sounds great, right? A utopia where every person gets whatever they want, whenever they want it?
Well, unfortunately, this is the part where I burst everyone's bubble and talk about the real, imminent, genuinely scary dangers network technology poses to our world, and the highly quantifiable (and accelerating) destruction it’s causing.

Why empowr (part 10)

by Johnny Cash on February 26, 2017

Why empowr (part 10)

Hello everyone,
Together, we've been reading the Why empowr book, written by one of the empowr founders. 
If you're interested in why empowr was created, or want to know where it's headed, this is a good way to find out.
Just joining the conversation? You can read the earlier parts here: 
Part 1:   Here
Part 2:   HerePart 3:  Here
Part 4:  Here
Part 5:  Here
Part 6:  Here
Part 7:  Here
Part 8:  Here
Part 9:  Here
As always, many thanks for your thoughtful comments that you left in the earlier parts; we're all reading your comments very carefully (and deleting spam and unrelated comments). 

Education is broken

Many first-world educational systems are now in decline. In some countries, schools are finding it nearly impossible to recruit quality teachers, with many teachers coming from the bottom 30% of college graduates. This leads to a nasty cycle, where bad teachers fail to teach students effectively, and those weak students then go on to be bad teachers, themselves, leading to a “dumbification” of entire generations.
 
 Combine this dumbification cycle with a lack of educational transparency which makes it very difficult for students to predict the value of potential degrees, and you begin to see why modern educational systems are in jeopardy.

It was my senior year of college, and I was absolutely miserable. As I sat in class, listening to my professor drone on in a thickly-accented monotone about a programming language that had been obsolete since before I even went to high school, I slowly began to zone out and think back to why I’d come to college in the first place…
After high school, I’d gone straight to the University of California, San Diego (UCSD) to pursue my bachelor’s degree in computer science. Being the giant geek that I was, I was very excited about the prospect of a higher education that taught me even more about computer science. I had thought that my college courses were not only going to teach me new, cutting-edge technical skills but that they were also going to allow me to work with professors who were as passionate about innovation and technology as I was.
What I found, instead, were college courses that were years behind the times, and professors who were more concerned with their research projects than with teaching and mentoring the next generation of tech entrepreneurs.
Adding to my frustration was the fact that nobody I spoke with, either on the faculty or in university administration, seemed to be able to explain to me what the hell was going on. No matter how many times I asked, I couldn’t get a straight answer as to why the courses were so outdated or how a professor made it through the interview and selection process without even being able to speak basic, understandable English.
The complete lack of accountability and the unwillingness of anyone within the system to take responsibility for addressing obvious, basic problems with the school were astounding…
Sitting there in class, my mind snapped back to the present. The professor was still tonelessly reciting her lecture while seemingly oblivious to the fact that she had lost the entire class long ago. And then, I suddenly made my final decision. I would not waste another minute of my time or another dollar of my money on classes and professors that had no value to me. I stood up, walked out of class, and dropped out of college. I went on to start my first business the very next day…

***

To this day, many years after I first went to college, there is still very little accountability for professors; it continues to be nearly impossible to fire a tenured professor (or teacher). This same lack of accountability applies to institutions. Many of them don’t even bother to keep track of how well their graduates do after leaving school or whether their curriculums even come close to preparing graduates for the challenges of 21st century business.

Schools are in Crisis

My college story is not unlike what many other U.S. and international college students go through every day. In fact, many young people seeking higher education have it far worse than I did from a number of perspectives.
Here in the U.S., things have gotten particularly bad for college students. While there has only been some slow, incremental progress in updating curriculums to keep pace with the needs of our post-industrial economy, tuition hikes since I attended college have been neither slow nor incremental.
 In fact, tuition and college-associated fees in the United States have skyrocketed an astounding 1,120% since we started keeping records back in 1978. No, I didn’t accidentally let an extra 1 slip by. That really says one thousand, one hundred and twenty percent. This mind blowing spike in tuition means that, this year, the average four-year-college graduate here in the States will leave school almost $30,000 in debt.
So what is this crushing mountain of debt buying U.S. college students? Well, between the years 2000 and 2007, wages for people with college degrees between the ages of twenty-five and fifty-four dropped 8.5% (and that was before the Great Recession).
New graduates with Bachelor of Arts degrees are dealing with 8.5% unemployment and a depressing 16.8% underemployment. This means that nearly one out of every ten recent B.A. grads can’t find a job at all, and, for those who do, there’s nearly a one-in-five chance they’ll be stuck in part-time jobs, jobs that have nothing to do with their degree, or jobs that simply don’t pay them enough to afford their student debt.
Additionally, despite burying their students in debt, U.S. colleges are still having trouble producing enough Science, Technology, Engineering, and Math graduates to meet the needs of our economy. These S.T.E.M. grads are critical to the global competitiveness of industrialized countries, and U.S. companies import tens of thousands of them from overseas each year.
Combine our college woes with the persistently mediocre global ranking of U.S. students between the ages of six and fifteen (despite the fact that only four countries spend more per student in this age group), and one begins to understand why so many Americans are calling for serious education reforms.
The U.S. isn’t the only country dealing with educational crises, either. Even Sweden and the United Kingdom, countries that for years were praised for the quality of their educational systems, have seen their students become far less globally competitive.

The Solution


empowr believes that the solution to education’s woes can be found when we allow ourselves to view and treat education as a product that, like any other product, will improve dramatically if it’s allowed to benefit from the same free-market dynamics that make other products better.
In other words, we need to make it so the bad teachers can be easily fired.
  Second, the best teachers need to earn as much money—or more—than most of their best counterparts in industry, making teaching a much more attractive occupation for the best and brightest. Third, teachers’ performances needs to be measured and made transparent to everyone, especially the product’s customers (the students and their parents).
And finally, along with access to teacher performance information, students need to have the power to choose their teachers, just the same way that we all can choose which car we drive, which mobile phone we buy and which bank we use.
We all saw what happened to the car, telephone, and banking industries—really all industries—in communist countries where consumers had little to no choice: a total disaster. And we also witnessed how those same industries developed in the West, under competitive and free market economics: an explosion of innovation, quality, selection, and value. In exactly the same manner, education needs to be freed from the centralized control of governments and unions.
But how do you truly measure a teacher’s performance, in order to make the above approach a reality? And how do you free educational systems so as to introduce free-market dynamics?
Fortunately, these are problems that empowr has been working on for many years now, and we’ll discuss our solutions in the chapter titled “empowr’s Approach to Education.”
But before we go there, let’s take a look at another phenomenon that’s quietly having an incredible impact on our lives. To understand what it is, you just need to walk into any classroom today, and you’ll notice many students paying far more attention to their smartphone apps than to their teacher. This disturbing phenomenon might actually be the perfect illustration of how education is in decline, while something completely different is taking over our attention and lives.
I’m talking about Network Technology

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