johnpfeiffer

Mid 2017 technology and business prediction for 2018 and beyond

The future already happened

The internet boom has arrived silently and the "everything is online" happened while we were all looking down at our smart phones.

New giants have emerged to rule the economic landscape that have eclipsed, at least in virtual specie, their physical-and-brick-and-mortar competitors: Apple, Alphabet (Google), Microsoft, Amazon.com... Facebook...

https://en.wikipedia.org/wiki/List_of_public_corporations_by_market_capitalization#2017

The market can stay irrational longer than you can stay solvent

-John Maynard Keynes

We have entered into an uncharted area in terms of economics; much financial data and many models indicate that 2017 is very near the peak of a trend.

The Case-Shiller Home Price Index is topping the maximums of 2006 and almost double the "normal" of 100 and the CyclicallyAdjustedPriceEarnings ratio is at 29, also soon to be double the median of 16. Neither of these tools are intended for "timing the market" or identifying the end of a trend, but they certainly indicate a longer wait for expected return on investment and higher level of risk of a "return to the mean".

The CAPE ratio hit 44 right before the "dot-com" bust (pokerface)

The most optimistic perspective is that globalization and technology have dramatically increasing efficiencies, though that same combination drove the "Roaring 20's" and (along with political and economic factors) created the "Great Depression".

Prediction of a Crash

I'll make a prediction (not that it will change the future in any way). Given the cyclical nature of economies, it has to come to pass sometime ;]

The United States is due for an economic crash soon

At a minimum a recession, most likely another "Great Recession", hopefully not another "Great Depression".

There will most likely be a catalyst like unexpected political collapse (Presidential impeachment), armed conflict (i.e. North Korea), or environmental disaster (i.e. global pandemic or solar flare).

Technology is not a root cause but creates the sense of instability in society and economics as efficiencies disrupt existing balances.

A "perfect storm" of global economic weakness with globalization that interconnects all economies

Populist moves to nationalism and tariffs

Deregulation and "pro-business" policies

Increased Migration

In the wake of global instability people will seek, in ever larger numbers, societies and infrastructure that are stable.

Those places that adopt policies and mechanisms to successfully integrate and take advantage of the influx of newcomers will do quite well.

Those places that attempt to remain isolated will incur ever growing costs and simultaneously be outcompeted by places that have successfully leveraged new ideas, new labor, and new capital.

Technology Predictions

We are rapidly moving into a new era of technology and information where energy is becoming cheaper than ever and computing has become more powerful and ubiquitous than ever.

Scarcity of Privacy

The proliferation of smart phones with cameras everywhere, drones, actively listening devices like Siri/Alexa/Google means that it is far harder than ever to be alone, unwatched, and unheard.

Big data means an unprecedented amoutn of correlation can be created.

While this benefits society in emergency situations (i.e. earthquakes, fire, crime, etc.) it also means there will be a lucrative business opportunity in technology that can actually restore privacy.

Pendulum swings back to decentralization

"The Cloud" is very popular now, the availability of energy and local compute (including smartphones) means it will become cheaper and cheaper to compute things locally.

Even as the internet has allowed incredible flows of data and exchange of information the amount of locally generated information ("internet of things") is growing very large very quickly as well.

Yet given the increasing requirement for security (and privacy) it makes a lot more sense to keep data and compute inside a protected space. One of the simplest ways to prevent hacking, keep data secure, and increase privacy is to never have the data leave its place of origin.

Homes, and more importantly businesses, will not want every camera, microphone, and sensor sending data into "The Cloud" to centralized (and often vulnerable) warehouses. Instead there is an opportunity for businesses and technology that leverage cheap compute to create "mini private clouds".

The slow deprecation of SMTP and HTTP (both unencrypted plaintext) being the backbone of the internet will be increasingly replaced with secure alternatives (encrypted, dedicated networks, extra authentication layers like 2FA and MFA) to create virtual tunnels.

The companies and tools that allow redundancy and accessibility of data in a secure fashion will profit from the abundance of local compute/storage and scarcity of security and privacy.

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