Will it become ‘Made in Internet’ instead of ‘Made in China’?

30

September

2017

No ratings yet.

How can we prepare ourselves for the future of Artificial Intelligence (AI)? According to Jack Ma, founder and chairman of Alibaba, we have to change the way we teach otherwise the future generation will lose their jobs.

Despite the fact AI has a lot of advantages – for instance increase of productivity, lower costs and more precision – we are still concerned about the fact that AI will exceed human intelligence and supplant us as the dominant species on Earth. In the last 200 years, manufacturing brought jobs. (Bundy, 2016) But today, because of AI, manufacturing is no longer the main engine of creating jobs. Products that, for example, were made in China will only be made by the Internet in the future.

Preparation time has started

To benefit from the advances in productivity brought by AI, we will need to reallocate to new types of jobs. If new jobs are not created, workers are likely to remain locked in their previous jobs or become unemployed. (Frey, 2017) According to Jack Ma, the new technology will destroy bunch of jobs, but it will also create plenty of jobs and the service industry will be the largest engine of the job creation. However, the current approach to education is not preparing today’s youth for the realities of tomorrow’s work. We have to teach them to be very, very innovative and very creative. (Ma, 2017)

Adaption will create jobs

In consequence of AI, a distinct wave of job displacement will almost certainly occur. New technologies in areas like AI and robotics will both create some totally new jobs in the digital technology area and, through productivity gains, generate additional wealth and spending that will support additional jobs of existing kinds, primarily in services sectors that are less easy to automate. (Wilson et al., 2017)

In my point of view, the future will be automated excessive, but human interference is still crucial. Humans are the best watchdogs for upholding norms of human values and morals. What do you think the future will look like according to the labour market?

References:

Bundy, A., 2016. Review of “Preparing for the Future of Artificial Intelligence”.

Frey, C.B., 2017. The Future of Jobs and Growth: Making the Digital Revolution Work for the Many.

Futurism. (2017). Jack Ma: the way we teach is going to make our kids lose jobs. [online] Available at: https://futurism.com/jack-ma-the-way-we-teach-is-going-to-make-our-kids-lose-jobs/ [Accessed 25 Sep. 2017].

Horowitz, J. (2017). Jack Ma: We need to stop training our kids for manufacturing jobs. [online] CNNMoney. Available at: http://money.cnn.com/2017/09/20/technology/jack-ma-artificial-intelligence-bloomberg-conference/index.html [Accessed 25 Sep. 2017].

Wilson, H.J., Daugherty, P. & Bianzino, N. 2017, “The Jobs That Artificial Intelligence Will Create”, MIT Sloan Management Review, vol. 58, no. 4, pp. 14-17.

 

Please rate this

Will e-commerce destroy the corner shop?

30

September

2017

No ratings yet.

How the digital players disrupt the retail market is barely news for anyone, enough to think about the fact that Jeff Bezos became the richest person on the planet lately for a few days. B2C e-commerce accounted for more than 500 billion USD in the last year, and it is exploding. Amazon and its peers in different industries and countries are building immense and perfectly efficient systems, which are breaking down the competition everywhere.

In this disruptive process, many traditional competitors will fail, especially those, in case of which the main driver of the value proposition is the price and the simplicity of shopping. Malls and big-box retailers are struggling and the department store staff is getting hired by the closest Amazon warehouse.

But if digital commerce is so efficient and convenient why Amazon launched its Amazon Go service, which is a traditional store (with some futuristic features)? Why some retailers with traditional profile, like BestBuy, thrive?

Let’s take the example of Silicon Valley startup Bodega, which became an internet sensation overnight, sometimes cited as the most hated Startup of Silicon Valley. Bodega’s idea was to meld AI with mobile retail by creating super-smart vending machines, analyzing and forecasting the demand and so provide sufficient products. Sounds something very disruptive and is fitting the current Silicon Valley trend, right? What was the problem? The name and the manifesto. They wanted to replace the Bodega, the traditional mom-and-pop corner store.

Community

Now we’re at the first attribute of the local retail which is hard to disrupt: community. The corner store, especially in immigrant communities is not only a place to buy goods, but also a meeting point, a sort of small agora in today’s (metro)polis. Families, communities support the owner by buying things here and it slowly becomes something way more than a shop. Access Bazaar, a NYC based startup is also disrupting trade, but the b2b segment: it supplies small shop owners on a web platform. Its founders are themselves of a Latino background, and see the importance of the corner shops within the community, or, as they call it, Bodega.

Retailers which build on communities or create living spaces instead of just selling things might have a place in the fabric of the city.

Interaction

Another important perspective of traditional retail is interaction. Interaction with the wished good, touching it, trying it and so on. Or interaction with the seller, if the given product requires greater expertise. BestBuy was struggling a few years ago as many customers just popped into their store, tried the newest gadgets quickly and ordered them from Amazon later. So interaction was important for the customers, but they were really price sensitive. As BestBuy introduced their best price guarantee program and improved their customer services, suddenly people rather ordered their new TV from BestBuy. As they say, BestBuy went from “brick & mortar to showcase & ship”.

So in case of specific goods, showcasing will remain important, so those stores might be able to retain customers where they can put experience in shopping.

Being local

The third aspect to highlight is being local, which correlates really strongly to the first suggestion, building on communities. Consuming local goods is becoming more and more important for the city people as, quality, eco-friendliness and locality go hand-in hand lately. Local players might cooperate, sell their products together, creating local urban markets. This requires low investment and have many examples throughout today’s cities from local farmer’s markets to craft fairs and pop-up stores.

I listed some alternatives, that are rather positive scenarios from social and urban perspective, as city spaces retain their role of being meeting points, places for social interaction.

In a negative utopia in-store shopping as we know it, touching and trying before buying will become a privilege of the few in a downtown flagship store.

Others will be picking up their pre-boxed purchase from a robotic service center somewhere in the suburbs, or it will be already packed in the trunk of their autonomous car. In these visions, social interactions are minimal and urban spaces are left unused.

Disruption always leads the markets to a more efficient state of operation, so it is generally considered a positive phenomenon, where some short term backlashes might occur, as the traditional ways and methods are replaced.

But the disruption of the retail industry is unlikely to be total, as there are some basic, instinctive needs of us, human beings: forming communities, interact and belong somewhere.

Vince Takács

487491

Sources:

RSM BIM Information Strategy, 2nd Lecture, 19.09.2017.

https://medium.com/sidewalk-talk/street-life-after-retail-5-scenarios-that-imagine-the-future-c7135f99dc15

https://www.citylab.com/equity/2017/09/here-is-everything-thats-wrong-with-bodega-the-startup-that-destroys-bodegas/539739/ 

https://venturebeat.com/2016/12/05/amazon-launches-amazon-go-a-brick-and-mortar-grocery-store-that-does-away-with-checkouts/

https://www.bloomberg.com/news/articles/2017-09-20/amazon-is-a-lifeline-for-retail-workers-if-they-live-in-the-right-city

https://www.fastcompany.com/40468728/access-bazaar-online-marketplace-startup-for-bodegas

https://www.nytimes.com/2017/09/18/business/best-buy-amazon.html

https://venturebeat.com/2017/09/13/bodega-silicon-valleys-new-most-hated-startup-says-its-ai-driven-vending-machines-are-not-evil/

Please rate this

Cybersecurity

30

September

2017

No ratings yet.

123456
password
12345
12345678
football
qwerty
1234567890
1234567
princess
1234
login
welcome
solo
abc123
admin
121212
flower
passw0rd
dragon
sunshine
master
hottie
loveme
zaq1zaq1
password1

If you just saw one of your passwords in this list, stop reading this and change it now. Given that this list makes up about 10% of all passwords in use, it is rather concerning. In 2016, cybercrime prevention spending was $81.6 billion. This is expected to increase to over $2 trillion in 2019. So what areas do these hacks affect? Are you personally affected, or is it just large companies?

In May of 2017, the ransomware WannaCry, a software that encrypts your documents and unencrypts them for a fee, spread through thousands of users. Although the concept is not novel, the sheer size of the attack stood out. One of the affected victims was the UK National Health Service. The reason for their infection was not that WannaCry was a state of the art software, it was simply because they were running outdated software. Another program, amongst many others, called Petya, also wreaked havoc in central Europe. Besides causing harm to individuals, many of Ukraine’s public sectors were affected, leading to major disruptions.

Not all damage is done through hacks, some are also due to negligence on the company’s behalf. An example is the improper storage used by a company named Deep Root. They improperly stored the information of almost 200 million US voters on a public Amazon server. Although this information was not abused, the fact that it was publicly accessible violates dozens of privacy laws.

Finally, some of the hacks that probably influence us the most, are political hacks. Although countries have been hacking each other for a long time, the recent hacks of the DNC and the Macron campaign did not go by unnoted. It appears that not only are our companies, private information and money not safe, but our governments are not invulnerable to such attacks either.

Please rate this

Should we regulate companies like Uber and Airbnb?

30

September

2017

5/5 (1)

In the last decade, there have been a lot of popular businesses like Uber and Airbnb operating in the sharing economy (Penn & Wihbey, 2016).  With Airbnb valued at $10 billion and Uber at $18,2 billion, they are disrupting the traditional hotel chains and taxis companies respectively (Cannon & Summers, 2014). It is not hard to see why since the pricing is lower, more transparent and on top of that gives both suppliers and users more flexibility (Zervas, Proserpio & Byers, 2014).

While there have been a lot of upsides, especially from the customer’s perspective, there are also some negatives. For example, Uber and Lyfe still have a lot regulatory issues in multiple countries and are even banned from some areas (GCF, 2017). The Uber drivers don’t have to abide all these rules traditional taxi drivers are bound by, which leads to an unfair competitive advantage. Furthermore, traditional hotels are held to a certain standard, have regulations and are being inspected for safety risks like firetraps. The apartments on Airbnb have none of the aforementioned rules and safety checks, so the customer could possibly be exposed to one or more risks.

Although services like Uber have unwritten rules, for example, an Uber drive is expected to take the shortest route. If the customer is not happy with the driver or the route he took, there is an option to leave a bad review or even ask Uber for a compensation. So in a way, Uber and similar companies are already being regulated, although not in the traditional way with rules but by the users themselves. If you add more rules and regulations to this system, it may hinder the natural process.

The sharing economy gives back power to the user, but this also comes with downsides. In general, these companies do give customers more options to pick from, though you have to be aware of the added risks. Rules do not always mean better service and could even hurt what makes the sharing economy so strong, a user regulated service. It is an interesting question how many rules exactly should be in place if any.

 

 

References:

  • Cannon, S., & Summers, L. H. (2014). How Uber and the sharing economy can win over regulators. Harvard business review, 13(10), 24-28.
  • Edelman, B.G., Geradin, D. (2015) Efficiencies and regulatory shortcuts: How should we regulate companies like Airbnb and uber?
  • Koopman, C., Mitchell, M.D. and Thierer, A.D. (2015) The Sharing Economy and Consumer Protection Regulation: The Case for Policy Change. The Journal of Business, Entrepreneurship & the Law, Vol. 8 Iss 2, 2015
  • GCF, n.d. Sharing Economy: Legal and Safety issues in the Sharing economy. [Online]
    Available at: https://www.gcflearnfree.org/sharingeconomy/legal-and-safety-issues-in-the-sharing-economy/1/
  • Penn, O. & Wihbey, J., 2016. Uber, Airbnb and consequences of the sharing economy: Research roundup – Journalist’s Resource. [Online]
    Available at: https://journalistsresource.org/studies/economics/business/airbnb-lyft-uber-bike-share-sharing-economy-research-roundup
  • Zervas, G., Proserpio, D., & Byers, J. W. (2014). The rise of the sharing economy: Estimating the impact of Airbnb on the hotel industry. Journal of Marketing Research.

Picture:
http://dailysignal.com/wp-content/uploads/airbnb-1250×650.jpg

Please rate this

What are nearly 500 WhatsApp employees doing all day?

30

September

2017

5/5 (2)

What would life be like without WhatsApp? The Internet communication service, founded only eight years ago by Jan Koum and Brian Acton, has already vastly replaced old-school SMS communication as well as non-Internet calling and is nowadays among the under-18 generation the preferred alternative to Facebook and by corporate employees higher valued than Email messaging for informal communication. Whatsapp’s user growth rates are astonishing, increasing somewhat linearly from 500m in April 2014 to 1.2bn in January 2017 (Source: Statista). Facebook’s acquisition of WhatsApp in October 2014 was initially scrutinized by investors, sending the stock down by 6.7% within two days of the deal announcement (Source: Yahoo Finance) – but investor sentiment about the strategic fit seems to have changed 180 degrees, boosting Facebook’s stock price to new all-time highs month after month. Mark Zuckerberg and Jan Koum have expanded Whatsapp from a 55-men organization in 2014 (Source: BusinessInsider) to a global Facebook subsidiary service with nearly 500 employees in 2017(Source: Linked) – however, considering the lack of innovation and updates in the app, I was wondering: what are WhatsApp employees doing all day?

Startups dominantly hire employees for one of three roles; sales, IT specialists, and business development. Considering the immense user growth and the expansion to many new markets, Whatsapp’s sales force must be up and running. Yet, selling and expanding the most popular social media network is highly scalable and requires much less manpower than doing door sales for hoovers or charity funds. The tech team continuously needs to maintain and improve the IT infrastructure, so that the server capacities can sustain the demand from an increased user base. However, this task is largely overlapping with the duties of Facebook’s teach team and cost synergies from a reduction of the tech workforce were a dominant rationale for the Whatsapp acquisition (Source: Fortune). This leaves us with business development. Indeed, Whatsapp has a high and pressuring need for filling such positions with skilled and innovative characters, since it has yet failed to report a positive bottom line. The company’s newest strategy is to establish Whatsapp as a corporate messaging tool and to charge companies for a business-optimized version. Even though this may be a very reasonable step to finally monetize the social communication service, I highly doubt that it requires a team of 100+ employees to implement this strategy.

Personally, I consider it intuitive that a company in the stage and environment of WhatsApp has a large business development team – however, I am doubtful whether a complete focus on monetization is the appropriate strategy. Given its role as market leader and its power through very positive networking effects, WhatsApp seems to underestimate the threat of new entrants – but advancing technology and new business models do challenge WhatsApp’s dominance. To give you two examples, the team communication application Slack has continuously improved its customer value propositions and recently achieved an increased valuation of $790m and the LA-based startup Dust, advised by Mark Cuban, offers a blockchain messaging platform that brings data security to a new level and allows its users to delete messages from the communication history. In order to stay ahead of its competition, WhatsApp should not only work on monetization strategies but also continuously improve its functionalities in order to keep its user base satisfied. Since sharing is caring, I want to use this occasion and propose two ways to augment my user experience: first, allow me to set reminders and calendar entries for my friends; second, enable the copying of chat histories that can be sent as a scroll-down item in lieu of several screenshots of a chat that you want to share with friends. These ideas represent no big innovation, but signify the main message of this blog post: In order to make monetization work, it needs both a good strategy and a large network. While WhatsApp currently searches for the first item, it should watch out to simultaneously maintain its exiting. In that sense, I suggest WhatsApp to direct a larger fraction of its workforce to maintaining and improving customer relationships – then I may eventually also understand what its nearly 500 employees are working on all day.

Please rate this

“Psychology!“ Said The Sorting Hat

30

September

2017

5/5 (1)

Imagine you’re having difficulty finding the right study for you. You’ve looked at a long list of possible studies at different universities, but you’re still not sure what fits you best. Wouldn’t it be great to have some help deciding which direction you should to go?

Anderson, an IBM engineer, created a real-life version of Harry Potter’s Sorting Hat. The goal of this hat was pure entertainment for his children, but the functionality can be stretched to real life use once it is further developed and possibly disrupt many existing practices.

Anderson’s Sorting Hat runs on IBM Watson’s Natural Language Classifier: a service used for understanding the intent behind text and responding in an appropriate manner, often used in chatbots nowadays (IBM 2017). It can place you in Hufflepuff if your speech proves honesty, or in Gryffindor when he detects courage.

Could this technology be used to help you choose what to study, perhaps even to test your intelligence and group you in a specific education level after primary school (VMBO/HAVO/VWO)? Dozens of tests already exist to help you choose your study or to help you understand who you are. Brixer, for example, is a tool used to identify your personality and measure different types of intelligence, cultural values and core competencies via an e-assessment. This can help you figure out what kind of job would suit your strengths best and even identify companies with a matching culture. Another tool that exists can be found on the website www.16personalities.com. This website helps you understand yourself by labelling you as one of 16 personality types, based on the Myers-Briggs theory and includes the Big Five personality traits. It can even tell you what type your best friend generally is or with what type of personality you would be most happy with in your love life.

What do you think: Is IT smart enough nowadays with AI and deep learning to be able to help you choose a hobby, friends, a study or a job? Can we benchmark people’s ‘specifications’, like we do with devices such as phones or laptops, or even cars? Would you feel uncomfortable with being labelled, stereotyped or pigeonholed by a robot, or would it actually help you understand who you are?

Sources:
16personalities.com. (2017). Our Framework | 16Personalities. [online] Available at: https://www.16personalities.com/articles/our-theory [Accessed 30 Sep. 2017].
Hoekstra, F. (2017). Rapport van assessment voor Vincent van Leeuwen – Brixer. [online] Brixer.nl. Available at: https://www.brixer.nl/profiel/1/publiek/ [Accessed 30 Sep. 2017].
Ibm.com. (2017). Watson Natural Language Classifier. [online] Available at: https://www.ibm.com/watson/services/natural-language-classifier/ [Accessed 30 Sep. 2017].
Muoio, D. (2016). A dad made a real-life ‘Harry Potter’ sorting hat using IBM’s Watson — here’s how it works. [online] Business Insider. Available at: http://www.businessinsider.com/real-life-harry-potter-sorting-hat-uses-watson-2016-6?international=true&r=US&IR=T [Accessed 30 Sep. 2017].

Please rate this

Price-setting in petrol stations, robots for the win!

30

September

2017

5/5 (4)

Keeping in mind that you don’t outsmart the competition by doing the same, a Shell-branded petrol station in the Netherlands takes competitive advantage of advanced dynamic pricing. In corporation with a Danish data analytics company (a2i Systems) the petrol station sets their prices based on dynamic retail fuel pricing (The Register, 2017).

Open competition between companies selling similar products commonly leads to price wars. The retail fuel industry is a good example of a competition where companies are pushing each other in a bloodbath by dropping petrol prices.

Where older pricing software are originally based on simple rules such as always keeping prices lower than the competition, advances in Artificial Intelligence (AI) allow retail and wholesale firms to move beyond dynamic prices for fast-moving goods. Data analytics company a2i Systems developed pricing software that’s focussed on consumer behaviour by applying AI to Big Data. The system uses mountains of historical and real-time data to identify the optimal price setting throughout the day. By learning when raising prices drove customers away and when it didn’t, the software is able to live up to the price sensitivity of customers (a2i Systems, 2017).

Chief Executive of a2i Systems Ulrik Blichfeldt said that this software is developed to benefit both the customer as well as petrol stations. “This is not a matter of stealing more money from your customer. It’s about making margin on people who don’t care, and giving away margin to people who do care,” he said (The Australian, 2017).

On the other hand, anti-trust laws could be challenged by the rise of AI pricing. Former anti-trust lawyer and now law professor Maurice Stucke said that eventually consumers will be going to end up paying a higher price (The Australian, 2017).

Makers and users of AI pricing state that whatever tools are used, the business logic remains human. What do you think? Will AI pricing help firms in fast-moving goods industries to stay out of the bloodbath or will it make collusion easier and aliens to fair competition?

Bao Pham

415129

References:

A2iSystems, 2017. Pricecast Fuel: retail fuel pricing – management and optimization. Retrieved from http://a2isystems.com/files/pdf/PriceCast%20Fuel%20Product%20Folder%20(’15).compressed.pdf

Orlowski, A. 2017. AI-powered dynamic pricing turns its gaze to the fuel pumps. Retrieved from https://www.theregister.co.uk/2017/05/24/aipowered_dynamic_pricing_petrol/

Schechner, S. 2017. Consumers lose, margins win when robots set the prices. Retrieved from http://www.theaustralian.com.au/business/wall-street-journal/consumers-lose-margins-win-when-robots-set-the-prices/news-story/f6729db857e74963921dfa3d00953ed7

Please rate this

Would you trade some carbon with me?

30

September

2017

5/5 (12)

Hurricane Irma turned out to be the strongest Atlantic hurricane ever recorded outside the Gulf of Mexico. Its extreme power caused a colossal devastation in the Caribbean Islands and the Southern US, led to a massive evacuation of Florida, but also pushed again the climate change and global warming topic to the headlines. While I am still very sceptical about human influence as a major cause of the global warming and I believe that there are many other important aspects that are beyond our control to be considered, I am certain that we, as humans, should be united in an effort to keep our planet safe and green for the next generations. CarbonX is another great incentive that can help each of us to work more closely in order to achieve this goal.

The idea behind CarbonX is to engage millions of people by materially rewarding them for a responsible carbon consumption. The company wants to achieve it by investing in carbon reduction projects and transforming the generated offsets into ERC20 tokens, (one of the most popular token standards for Etherum Blockchain) later are allocated through an open-loop rewarding loyalty program. The engaged partners (e.g. big retailers, local governments) will offer CarbonX Tokens to consumers as an incentive for more carbon-wise decisions (e.g. using a public transportation instead of driving a car). These tokens will be tracked via mobile application and will serve as a currency that could be exchanged either for other digital currencies or carbon-friendly rewards. Although CarbonX is currently available in Canada only, it has ambitious plans to expand its operations worldwide in order to achieve substantial network effects and have a real global impact.

What I really love about this idea is the fact that it directly engages individuals to take small actions towards a more sustainable living. How often do you see people behaving irresponsibly just because they think that their impact on the environment is marginal? How often do you actually behave this way? While governments and NGOs can push some incentives on the macro level, we cannot forget that each of us creates this ecosystem as well. These tiny rewards do not only bring its users tangible benefits but more importantly increase awareness of the consequences of their actions. So, tell me now. Would you like to trade some carbon with me?

References:

  • https://www.carbonx.ca/#ourmission
  • https://www.theguardian.com/sustainable-business/2017/jul/13/could-a-blockchain-based-electricity-network-change-the-energy-market
  • https://en.bitcoin.it/wiki/Myths#Bitcoin_mining_is_a_waste_of_energy_and_harmful_for_ecology
  • http://edition.cnn.com/2017/09/15/us/climate-change-hurricanes-harvey-and-irma/index.html

 

Please rate this

How to Feed the World using Tech

30

September

2017

5/5 (1)

Even though in most countries obesity is on the rise, undernutrition is still a prevailing problem causing many deaths. In 2016, undernutrition was responsible for nearly half of all deaths of children under age 5 (Unicef, 2016). This problem will be increased by the expected worldwide population growth 0f 35% before 2025. An increasing percentage of the population will be urban, which is likely to lead to a shift in consumption patterns from staples to processed foods, fortified with more dairy and meat, which will ultimately require a larger amount of primary foodstuffs to produce. If the current rate of annual crop yield improvement is maintained into the future, there will be a huge gap between demand and supply in 2050 (Long et al, 2015). Many scientists suggest that Genetically modified foods (GM foods) are the best bet for feeding the world, in order to reduce undernutrition and the increasing gap between supply and demand (Scientificamerican, 2015).

GM foods are foods produced using organisms whose DNA has been changed using genetic engineering. These changes in DNA include the transfer of genes within and across species boundaries to produce improved or novel organisms. This can make foods resistant to certain types of disease. Current applications of the technology are common in cash crops such as corn and soya bean, but they can go as far as GM livestock (Wikipedia, 2017).

The reason why many scientists are so optimistic about GM foods and its possibility to feed the world is that the fact that GM is currently the fastest growth sector in agriculture (The balance, 2017). GM products are more resistant to disease, stay ripe longer, and grow more robustly. Products, such as the Flavr-savr Tomato, can reduce production costs by about 20%. Livestocks can also be raised inexpensively, being fed GM crops. This cost reduction in food production and extension in time that food remains edible, can possibly feed more people worldwide. Furthermore, some GM foods are engineered in a way that they can contain more nutrients, such as calcium or protein (Healthline, 2017). This can effectively target the problem of malnutrition, since it can supply countries that do not have acces to certain types of nutrient-rich foods with the specific nutrients that are lacking in the population’s diet.

Even though there are many supporters of GM foods, concerns consist about the application of GM technology, such as the following:

  • The technology is relatively new. Extensive long-term research about GM foods’ effects is therefore not available. Concerns exist about the technology’s safety, linked to allergies, cancer and antibiotic resistance (Healthline, 2017).
  • It is debatable whether GM foods can reach the places where undernutrition currently is most common. This concern is twofolded. First of all, many poor countries affected by undernutrition are not able to produce GM foods themselves and also restrict import of GM products. Second, producers of GM foods mostly have profits as their first aim. They produce foods that are eaten by people in rich countries, in order to optimise their profits (The balance, 2017).

In conclusion, although GM seems a promising way to reduce world hunger, it is still restricted by several concerns. Extensive research needs to be carried out before people will truly trust the safety GM crops. Furthermore, due to economic and political reasons, GM might not be as effective as possible in reducing current undernutrition in poor countries. However, when over time the population grows, income and consumption patterns shift, and the gap between supply and demand of foods widens, GM might provide a possible solution.

Sources:

https://data.unicef.org/topic/nutrition/malnutrition/

http://www.cell.com/cell/fulltext/S0092-8674(15)00306-2

https://blogs.scientificamerican.com/food-matters/gmos-are-still-the-best-bet-for-feeding-the-world/

https://en.wikipedia.org/wiki/Genetically_modified_food

https://www.thebalance.com/can-genetically-modified-food-feed-the-world-375634

https://www.healthline.com/health/gmos-pros-and-cons#pros2

Please rate this

Technology of the week – How did the video industry change over time?

29

September

2017

5/5 (9)

The video industry has a long history of incremental evolution; black-and-white boxes turned into colour on flatscreens and videotapes converted into DVD’s and Blu-ray discs. Moreover, the quality of videos also increased throughout time due to technology development. Information goods are goods that derives their value from the content they carry, rather than from the medium that is used to capture the content. Now, the industry is making room for online and mobile platforms such as Netflix, Videoland and HBO.

The changes in the industry let to changes in the business models. Previously, most market players earned one-time revenues, for instance by selling or renting out a video or DVD. When the internet emerged, this business model changed. Nowadays, market players earn money by introducing subscription models, such as the streaming service Netflix. Since information goods have low marginal costs, market players (e.g. Netflix) could offer a bundle of films on a platform for a fixed amount per period. This disruption led to the almost complete disappearance of physical videos and video rental.

Furthermore, historically Netflix started off with DVD rental through mail and in 2007 they complemented this service with online streaming. At this moment they are one of the biggest companies in the online streaming market. Some competitors of Netflix, such as Blockbuster did not make the switch from DVD rental to online streaming and went bankrupt (Business Insider, 2017).

The Porter’s five forces demonstrates the disruptive effect of Netflix on the industry. The competitive rivalry is high, due to larger competitors having exclusive rights to films. The threat of substitutes is also high, due to traditional video industry being substituted by streaming services and the threat of illegal downloading. Furthermore, the power of consumers is low, due to non-financial switching costs (long-tail and customization). On the other hand, the power of suppliers is high, since they hold the films rights and can give these to any market player they want. However, their power depends on how popular the film is. Lastly, the barrier to entry is high due to the arrival of the internet leading to large market players such as Netflix and the positive feedback loops.

The prediction of the video industry in the future, is that all series, films, netflix and TV shows will only be available on-demand. It will be possible to watch specific films or episodes whenever or wherever you want. Furthermore, these platforms are all going to offer personalized programs. The annual revenue of Netflix increases every year and is expected to keep on rising due to new market possibilities in developing countries (Statista, n.d.). There may be possible implications during this new phase of streaming. Bundling allows sellers to offer a menu of different options. Customized bundling gives consumers greater control over the content of bundles they purchase. From the sellers point of view, this may translate into lower sales volumes due to smaller bundles sold and higher transaction costs.

Watch our video here!

 

References

Business Insider. (2017). How Netflix Bankrupted And Destroyed Blockbuster. [online] Available at: http://www.businessinsider.com/how-netflix-bankrupted-and-destroyed-blockbuster-infographic-2011-3?international=true&r=US&IR=T [Accessed 20 Sep. 2017].

Statista. (n.d.). Statistics & Facts on Netflix. [online] Available at: https://www.statista.com/topics/842/netflix/

Please rate this