Predictions are always fun to read, because they make you think about the future. However, most predictions end up being wrong. Only a few in the “prediction game” are confident enough to actually grade their efforts year after year.
One of those – and the predictor I typically put most stock in – is the publisher of “The Strategic News Service”, Mark Anderson. He reliably scores over 90% on his 10 annual predictions each year – which he presents in December.
Last week Mark talked about those predictions (which you can find at the end), but also laid out a fascinating geopolitical analysis as a way to frame where the world is headed over the next few years – particularly when it comes to how and where new technologies will come to life.
Just like companies, according to Mark, nations have business models as well, and those models are driving most of what’s happening in the tech world today. There are just two business models that matter – Inventing Nations and Copying Nations.
Inventing nations – like the US, Australia, most of Europe – are focused on creating amazing new things. That’s where the microchip, GPS, sensors, and pretty much everything else were developed, and those developments are driving our accelerating rate of technology progress.
Then there are the copying nations. These include Japan, Taiwan, China and South Korea, according to Mark, and they steal the intellectual property created by inventing nations, and profit from that theft. He calls this “info-mercantilism”, and explains how it’s been happening for years – in the tech space since Japan and Taiwan copied early computers, and more recently when Korea copied cellphone, LCD and memory chip technologies to, in many ways, leap-frog past Japan and Taiwan.
And then there’s China. When China flipped from its past model – Maoism, to info-mercantilism, it was as if a 200-ton elephant just sat on everyone else. China not only started stealing IP from the US and Europe, but also started copying the first generation copiers. Samsung copied Apple, and now we’re seeing Huawei and other Chinese companies stick it to Samsung. Look no further than the No 1. Note4 – my friend Nicole Scott over at Mobilegeeks did a great job comparing this $160 clone to Samsung’s $650 Galaxy Note 4. They are virtually indistinguishable except for the fact that you can have four of one for the price of one of the other.
Will China in turn get disrupted by a new emerging country? Mark thinks not, but he’s still not sanguine. He thinks China is in real trouble – due to its “Great Wall of Pollution” – bad air, bad water, tainted food – which is beginning to wear heavily on the population. In addition to destroying the environment, Mark’s critical of their GDP numbers as well. He thinks the leaders are playing a big game of “hide the weenie” when it comes to economic numbers overall. To remain solvent, and to continue to ameliorate the masses, China needs annual GDP growth of 7-8%. Less than that and there’s real risk of political instability. Oh, and last quarter the Chinese government announced GDP growth of just 7.4%. Mark thinks that’s way too high – it’s probably in the 4% range instead.
Does that mean China’s about to blow up? Not anytime soon, says Mark. “But they (the leaders) are smart, it can go on for 10-15 years.” However, he warns, when it starts to go bad, it’ll be incendiary: “when it falls it REALLY Falls.”
How about Russia? Premier Putin has an 87% approval rating, and Mark thinks we’re dealing with him in completely the wrong way. Boxing him into a corner is wrong he explains, because “the more we push him, and threaten him, the more he thinks that he has to be the guy”. Instead we should try to negotiate a solution that saves face. If we don’t, cautions Mark, things will get really ugly, particularly for the entire country of Ukraine.
As for Japan, Mark thinks that the doom and gloom is misplaced. “Japan is the richest country in the world now”, he insists. Their business model is based upon exports, and they are crushing it.
He’s not so sanguine about the European Union (EU). He calls it “The German Union”, as Germany is now calling the shots across the continent. It was a mistake to put southern Europe – Italy, Greece and Spain – together with northern Europe (Germany, France, Belgium, Netherlands). “Those gears don’t mesh”, says Mark, and he isn’t optimistic about the Euro. The big question, in his mind, is what the Nordic countries, including Denmark, Norway, Finland and Sweden will do. They aren’t part of the Eurozone, and are doing well. Will they stand for “The German Union”? That’s the big question facing Europe right now.
India’s in pretty good shape, according to Mark. He’s particularly intrigued by the new political reality in south Asia, particularly around the Bay of Bengal. India is leaning very heavily into the US right now, and away from China. Sri Lanka is doing the same; they just kicked the Chinese Navy out of their ports. These guys will be besties with the US going forward, leaving China even more isolated. But there’s bad news for Australia, where China owns nearly a third of all the businesses there. Australia’s in trouble, according to Mark, as the prices of raw materials continue to drop.
Speaking of raw materials, Mark says that low-cost oil is here to stay, and that’s awesome for almost everyone. He predicts that oil will stay in the $50 to $80 a barrel range, and that it clearly “is not going back to $200 a barrel in my lifetime”. OPEC is done, he insists, because the Saudi’s can no longer control the price of oil, now that so many other sources have come on-line just as conservation efforts are starting to take hold.
Why is that good news? He sees the price of oil as a tax on every nation in the world. And as the price of oil drops by $50 dollars a barrel, suddenly there’s trillions of unexpected dollars that would have been spent on gasoline now available to build new schools, bridges, and other great things. Governments will try to hide it, Mark cautions, but it’s “a big gift to the world”.
Finally Mark talked about one of the most important chip breakthroughs in the last 30 years – the new “True North” chip from IBM. This chip more closely resembles how the human brain works, and will bring pattern recognition to the masses. This will “completely change how we make computers”, with more powerful and less power-hungry models due out soon. Of course that might lead to the singularity, where robots take over the world. But we’ve got a few more years left before we have to worry about that.
Here are Mark’s predictions for 2015 – note that his Amazon prediction is already on its way to proving wrong, which based on his track record means you can take the others to the bank:
Top 10 Predictions for 2015
- Digital Currencies Multiply, and Go Nowhere. When will geeks learn that currencies are more than hard math problems, and require the good faith, economic strength and military power of a nation in order to warrant the trust of others? Not next year.
- Net Neutrality Survives the onslaught of US lobbyists, but carriers are thrown a bone of some kind by old friend Tom Wheeler.
- Pattern Recognition becomes the real goal of Predictive Analytics and Big Data collection, and PRP Chips (Pattern Recognition Processors) and a whole new ecology of tools and languages begin to arrive in developers’ hands, setting the stage for a revolution in computing.
- Security takes its rightful place in the CEO agenda, and corporate spending on security reverses its current downward trend. The cost of building an insecure Internet is paying for security, and this is the year when all of the tickets come due at once. (Russia gains more fear and respect as a cyber warrior, and China gains more global scorn as a cyber thief of commercial IP, and the press will do a good job of confusing the two.)
- VR remains exactly that virtual everywhere except in gaming and fringe entertainment. Just because Zuck has a good lunch date with Oculus, doesn’t mean the rest of the world has not already taken a pass on this technology for decades.
- Amazon stumbles – as Jeff’s appetite finally exceeds his reach, and customers are turned off by his megalomaniacal drive: the Fire phone debacle, off-book rocket adventures, hapless drone delivery scenarios, Hachette punishments, all lead to a loss of customer, and investor, confidence.
- Home Networks finally get off the launchpad, and it turns out that all people want is low energy bills, TVs everywhere and a single remote. What they don’t want: talking refrigerators, things that don’t work, complexity replacing reliability, more nested menus instead of real buttons, dumb things talking to other dumb things, or, worst of all, hackable home networks. Samsung and Apple lead the pack in this race.
- Apple Pay succeeds, establishing its leadership in the new MALT category. With Mapping improved and Micro-mapping driven by Beacon, Advertising dollars following Beacon merchandising edge, Location provided by phones and Beacons, and the final Transactions step now well in hand with Apple Pay, Apple achieves the technical and market steps necessary for domination of retail and physical space services.
- Encryption continues its exponential expansion: everywhere, deeper and end to end, a continuing major trend. Thank you, again, Edward, for protecting us from China and Russia, as well as ourselves.
- Personal Health, Fitness and Lifestyle devices merge. The doctor / patient relationship begins an inevitable and irreversible shift in power and cooperation. We’ll see a flood of new watches, bands and jewelry, but intelligent clothing stays fashion-niched because of price and inconsistency. New goals for the device genre: non-invasive measurement of blood pressure and glucose levels, and for the fanciful: creative visual displays of body state, such as heart rate and galvanic skin response, perhaps even a lovers’ proxy touch. New creative energies in science and design rush in.