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The Bulletin, issue no.4

August 10, 2009

By Ian Perason and Rohit Talwar, August 2009.

Future Security Issues

As we look beyond the current downturn, we believe that security is going to raise its head as a multi-dimensional issue for nations, organizations and individuals. Over the next few editions of the bulletin we will explore a number of critical aspects of these future security threats.   In this issue, we start by focusing on two increasingly important and somewhat overlooked dimensions of the security challenges associated with information and communications technology – policy and hardware threats. These will have impacts at every level in society from securing personal information through to protection of the data that is the lifeblood of national economies and critical infrastructure.

Policy-based threats Perhaps counter-intuitively, we believe that overzealous organisational security policies could be an ever-increasing and potentially serious source of risks and threats in their own right. Human nature drives employees to attempt to bypass procedures that get in the way of doing their job. If they want to access something forbidden by a security policy, they are likely to step outside of the secured domain by using their own equipment, or by being devious. In the extremes, staff can end up doing a lot of their work on their own equipment rather than use that provided by the organisation. For example, we recently met the marketing department of a major global consumer products company which is not allowed to download the many daily attachments sent to them by their various agencies. Productivity and efficiency is seriously hindered as staff have to download the documents on their personal emails at home and then ask the IT department to load them onto the network for their colleagues to review. It can take 48-72 hours before the marketing team can all have access to a key document.    As a result of these everyday workarounds, employees’ work may be conducted substantially outside the influence of any security controls that exists.

A wiser approach is to work with the employees to understand the nature of their work and interactions with the outside world. This allows us to establish a cooperative policy that staff will adhere to willingly – instead of trying to impose one that they are likely to be tempted or compelled to ignore or bypass.   Additionally, if a policy is too tight, but staff are nevertheless forced to follow it by some means, it might have the result of reducing performance and productivity. If it is too hard to do the job, it will take longer or not happen at all. This is obviously a threat to the wellbeing of the organisation, making it unproductive, uncompetitive and possibly threatening its existence. A policy designed to protect a company should clearly not threaten the ability of the company to function efficiently by impeding the ability of staff to do their jobs well.   A more sensible security policy is one that provides strong protection for key intellectual property and essential systems, but is more flexible in other areas. Staff should be trusted to do their jobs responsibly, with good management and if necessary, disciplinary procedures to encourage compliance with ‘common sense’ and good business practice. Given greater freedom and clearly sensible boundaries, most employees respond with responsible behaviour.  

 Hardware based threats Concern is beginning to increase because most virus protection applications only check for software based viruses. However, it is possible to build increasingly dangerous hardware based attacks, using what are known as ‘field programmable gate arrays’ (FPGAs) to build custom hardware that interface directly with other equipment and bypasses software virus security checks. Although this is seen as a relatively new phenomenon, it is likely to grow as a problem, driven by improvements in design tools and the increasing availability of powerful, yet small devices.  

Another hardware threat arises from the deliberate introduction of malicious algorithms into the hardware during the design or manufacturing processes. It is quite possible to design hardware that achieves all its legitimate requirements but which also has hidden circuitry that only comes into play when a particular instruction is received or a specific set of circumstances arises. These viruses can go undetected because hardware testing can only make a finite number of tests while there are an infinite number of ways in which these ‘back door’ viruses can be added invisibly into circuit designs. To make the problem even more difficult to address, circuits that appear to be quite innocent might also be part of a larger malicious circuit or algorithm that is only triggered when other devices or software applications are brought into play. Such jigsaw approaches can be impossible to test for. These ‘sleeper circuits’ could already be waiting in millions of machines, only coming into play when the final piece of the jigsaw is introduced via accessing a superficially benign web site or an otherwise innocent-looking email.  

 The next hardware based threat to consider is that posed by personal data storage devices. Memory sticks are improving rapidly in capacity. Although at home, people may have large volume of music or video files that would not fit on today’s memory sticks, they are able to store all the files a typical employee uses in everyday office work. They present an obvious and direct security threat if employees use them to store confidential data, since they are easily lost, forgotten, or left in someone else’s USB port. They are also a good vehicle for viruses to cross between machines, though most virus management software attempts to protect against such problems. Some large companies prevent their computers from accepting memory stick connection because of this, but they are also disadvantaged because they lose all the benefits that memory sticks bring. This is a good example of a trade-off between work flexibility and risk management. As memory sticks continue their increasing penetration into every area of our lives, it will become necessary to have security polices that accept this use and work around it.  

Miniaturisation is the next and growing area of concern. Ongoing technology advances are making it increasingly possible to do very sophisticated things with tiny gadgets. Putting a microscopic surveillance device into a piece of office equipment might allow signals to be intercepted and recorded during printing or scanning tasks. Then could they sit quietly until their owner removes them for subsequent downloading. Such miniaturisation will make corporate espionage easier. In fact, as devices get smaller and smaller, there will come a time where ‘smart dust’ (nanoscale electronic sensors and computing devices) becomes so tiny that individual devices could be too small to be seen by the naked eye, making it almost impossible to detect them. Since such devices could be largely passive, and only respond to particular types of signal, they might be hard to detect even electronically.  

Finally, every year, new devices will appear that add to the range of potential gadget-based threats. We are only a few years away from being able to incorporate almost any kind of IT function into small pieces of jewellery. For example, by 2015, it is likely that a small electronic lapel pin will be able to act as a personal wireless web site/blog/ego badge. These devices will broadcast information about their owner into the nearby space and interact with badges worn by other people for social or business networking purposes. It might simultaneously act as a phone, processor, tracker, security badge, music player, video camera and perhaps many other things too. Size and shape will be no constraint on function in the future. Staff will not expect to have to leave personal devices like this behind when they go to work. So companies will have to build security systems that can cope with very high levels of personal electronic functionality, with all the potential for malicious presence on those devices.  

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The Bulletin, issue no.3

July 3, 2009

By Ian Pearson and Rohit Talwar. July 2009.

How Robust is your Economy?  

In this thought piece we highlight three questions which people in each country should ask themselves to judge the capacity of their economy to prevent and withstand future economic shocks.  

We are constantly being asked for our views on the economic outlook and on how the economy may evolve in the coming years. As stated in a previous newsletter, we believe that a spending dam-burst is imminent, but that doesn’t mean we are over the worst of the crisis. For example, the IMF tell us that only around half of a total estimated US$4.1 trillion of sub-prime losses have worked they way through the system globally. The IMF and OECD are also warning that the impending pensions crisis could have ten times the impact of sub-prime and the debt of rich G20 economies will exceed 100% of their GDP in 2010.   However, despite these growing risks in the ‘system’, not every country is equally affected and we believe there are many different scenarios for how the downturn and recovery could play out – with V, U, W and L shaped trajectories all plausible for different economies from where we stand today.   We believe you have to look at this on a country by country basis to assess the resilience of the economy to future shocks, judge the level of confidence among businesses and consumers and define your strategy for riding out the situation.

To help determine how resilient your own economy is to future shocks, we suggest asking yourselves the following three questions about your country:  

1.   Will the current regulatory system and the changes planned in the near future prevent your banks from creating crises such as the one we’ve just experienced?

2.   Do your governments now have better early warning systems and coping mechanisms to detect and deal with future banking crises while they are only weak signals?

3.   Does your economy have the financial resources to manage another bail out on the scale of the one we’ve just experienced?    

 

Preventing Coastal Erosion  

 In this article we propose an alternative approach to tackling coastal erosion around the globe which would also cut carbon emissions and reduce plastic levels in landfill and waste dumps.  

The latest nightmare environmental forecasts suggest that much of the UK coastline will be affected by severe erosion. Indeed, some parts of the Norfolk coast are already suffering dramatic erosion. The official policy is not to protect such areas, but to allow erosion, for various reasons. In areas where protection is needed, often, concrete blocks are dropped into the sea to absorb or deflect the wave energy.   A seemingly unrelated environmental problem is the disposal of plastic. Much is recycled now, but a lot still ends up in landfill sites or waste tips, which are filling up fast all over the world. Big concerns have also been raised over the potential for non-biodegradable plastic to remain in the environment for hundreds or thousands of years.   However with a bit of imagination, both of these problems could be tackled together. When plastic is recycled, it is gathered and compressed into cubes for easy handling and distribution. If these cubes were wrapped and weighted, they could be thrown into the sea instead of concrete blocks, solving several environmental problems at once. Concrete production consumes energy and produces large amounts of carbon dioxide, both of which would be averted. Raw material costs would be reduced since the plastic is waste and in plentiful supply. It would hang around in the sea for many years, and as the blocks accumulate, they would provide an artificial reef, before becoming a good base for reclaimed land, while reversing the erosion process. During this time, the plastic blocks would be locking up carbon, making the plastic ‘reef’ carbon negative, as compared to the carbon neutral recycling process. And of course, landfill would not fill up as fast.   A plastic reef could be used to effectively seal off a region of coastal sea, making it possible to use it as landfill for other kinds of waste without the danger of sea pollution. This would accelerate the creation of reclaimed land as well as creating more landfill capacity.   One major obstacle is that under EU law, it is currently illegal to dump plastic in the sea. At the same time, landfill is highly taxed. It would be very sensible to review both of these obstacles to make such solutions feasible, as there would be very substantial environmental benefits. It is ironic that laws designed to protect the environment are now the major obstacles to one environmental solution.      

 

Artificial Stupidity  

Here we highlight the risks of increasingly slavish reliance on artificial intelligence systems for decision making in domains ranging from healthcare to insurance.   Artificial intelligence continues to have ever-greater impact on our everyday lives, even though it is mostly behind the scenes performing tasks such as improving search engines, recommending music, finding the fastest route and so on. On a good day, an AI system can make as good a medical diagnosis as a GP. Indeed, many GPs now check their own diagnosis against an on-line expert system (a fairly basic but effective form of AI). However, doctors are still needed because their own human skills are able to obtain more valuable data from the patient by asking questions and noticing body language signals such as hesitancy, facial expressions and so on. This extra data can lead the doctor down new channels of enquiry and improve diagnosis.   Airport security too is starting to use AI to spot potential risks, by examining human behaviour, even the ways people walk, and their responses to questions. Such uses of AI, with appropriate precautions, are beneficial, improving our well-being while reducing costs. However, in spite of this progress, most AI is still very bad at understanding the world and offering good solutions. We all remember Microsoft’s paper clip ‘assistant’, which was often far worse than useless. The term ‘artificial stupidity’ arose to describe such low quality AI ‘solutions’.   Now a new, worrying trend is emerging, where people are forgetting to use their own judgement along with the AI, and just accepting the output without question, and using it as an excuse when it all goes wrong. It may in fact be due to our litigation culture. We are becoming familiar with stories of trucks getting jammed in corners on country lanes because drivers blindly followed their satnavs. More serious is the trend of doctors beginning to rely too much on AI instead of their own judgement.   Ian’s own personal experience a year ago highlights the pitfalls of becoming totally reliant on machine intelligence: “A doctor told me that the deep vein thrombosis I am certain I had (and I am no hypochondriac) couldn’t be one because there was 93% chance that I shouldn’t have one. A 93% chance is just that, no more. It is not certainty. But because I only had a 7% chance of having a DVT, I was sent home without any treatment, or any suggestion of a possible alternative cause for my symptoms. The effects afterwards correlated very highly with it having been a DVT, one of the 7%, but if I had died from it the doctor would have been seen to have followed the book and I would be just another medical statistic. My medical records still state that it was not a DVT, but that is something that was never actually checked.” Such abuses of computer systems are becoming much more common, and it is a dangerous trend. When ‘probably is’ becomes the same as ‘is’, we have a real problem.   Blind faith in computers appears to be increasing, with growing state use of computers and AI systems, and too few checks made on accuracy. When AI makes deductions from false data, then the results will be wrong, yet the consequences are just as real, leading to anything from a poor credit rating to death. Litigation threats increase the desire to have someone or something else to blame, the computer being an ideal candidate that we all love to hate. But unless we nip this trend towards blind technological reliance in the bud now, it will become a real threat, both to the benefits that can be harnessed from properly-implemented AI and to our lifestyles.    

Artificial Intelligence – Servant, Friend or Master?  

In this second article on AI we explore some of the alternative views on how humans and machines might co-exist in an increasingly artificially intelligent world.  

A fascinating session on the future of connectivity run by the Club of Amsterdam at the RSA in London on June 25th highlighted some critical challenges posed by technological advancement. The suggestion was that a combination of massive increases in processing power, communications speeds, bandwidth and machine intelligence were going to leave humans as poor relations to the computer systems which would run commerce and every other aspect of our lives. As futurists we’ve heard these discussions many times before but what’s interesting now is how the pieces are falling in place sufficiently to warrant real public debate on how we want to live in a world where literally everything from roads to our shoes could be web enabled and ‘intelligent’.   A vision was painted of the computers taking care of business while we enjoyed infinite leisure time and had 3D movies projected into our brains. This concept is actually taken a stage further in the forthcoming film ‘Surrogates’ – in which humans stay at home and life their lives entirely through their robot clones which represent them in the ‘real world’. At the debate, an alternative view was that AI systems would actually be harnessed to serve us better. Imagine the mobile phone come credit card that prevents you from making a purchase because you’d exceed your personal carbon limit or which encouraged you to pause or end a phone conversation because you were becoming too stressed.   For us, three critical questions arose from the debate. Firstly once artificially intelligent computers with a capacity for learning start to design other computers, would there be any mechanism to monitor or control what was happening? Secondly, how would society make the choices about the role of technology in our lives – or would it just happen through a continuous process of encroachment? Finally, what about the 4 billion on the planet living in genuine poverty? They cannot all become subsistence farmers with a mobile phone to help them find the best market prices. Will this group at the bottom of the pyramid simply be left to eke out a life as they do now, if not how could these advances in technology genuinely enhance their health, education and income prospects? Or would our leaders – human or machine – make still more drastic choices about the lives and value of the underclasses?

The Bulletin, issue no.2

June 10, 2009

By Rohit Talwar and Ian Pearson. June 2009.

Welcome to issue 2 of ‘The Bulletin’

This is the second issue of the Bulletin – a monthly(ish) newsletter that we’re producing jointly with Ian Pearson of Futurizon.  In each issue we provide short views on a range of topics and issues shaping the future. This is a companion to the new fortnightly FutureScape newsletter which focuses on sharing interesting research findings.
 
Government capitalism and public debt – where’s the debate about the future legacy of current decisions?
We are increasingly surprised at the lack of true public debate about the long term impact of current government spending commitments around the world. The US$50Bn privatisation of General Motors by the US government has brought the whole issue of government capitalism and public debt into sharp focus. For most mere mortals, the sheer scale of the bailouts packages for banking and the stimulus measures for the broader economy are difficult to comprehend. 
 
The IMF estimates that total sub-prime losses could reach US$4.1 Trillion globally, and it forecasts  that the ‘rich’ G20 countries’ debt will to grow from 83.3% of GDP in 2008 to almost 100% in 2010 and that Japan’s debt burden could be 225% of GDP in 2010. The US Congressional Budget Office estimates cumulative deficit from 2010 to 2019 will total US$9.3Tn, and public debt would rise to 82% of GDP by 2019. In the UK the estimates for total public sector borrowing in 2009 range from £170-200Bn (US$270-320Bn). Some analysts are saying it could take into the 2030’s to pay back the cost of additional borrowing and quantitative easing measures.
 
Most people expect long term interest rates to rise to in order for governments to attract the necessary debt funding. Beyond this, reducing debt will require some combination of increased taxes and reduced public spending. Of course governments could just drive inflation to reduce the scale of debt relative to GDP – but the consequences are not considered that desirable.
 
Our concern is that there really hasn’t been a huge amount of rational debate about what this scale of borrowing means in practice. Decisions have been made in our names over bank refinancing, industry bailouts and stimulus packages. What say have we had over where we think the money should be targeted in order to ensure civilized growth and a sustainable society? Where is the objective analysis to show that bailing out inefficient carmakers and greed-driven banks is the best option for securing the long term health of our economies, driving job creation and enhancing skills development?
 
Furthermore, if we are going to pursue some mix of spending cuts and increased taxation – who is laying out the options for debate and the consequences of each option? How can we decide the right mix and what tax levels it’s reasonable for individuals to pay in return for efficient and effective public services? The media has a critical role to play is facilitating this debate – instead most seem to be focused on laying waste the politicians and sensationalist headlines about hospital closures and failing schools. The depth of the problems facing developed economies requires us all to step up and take a far more long term and mature perspective to discuss these issues based on what we want for the future of our nations and the sacrifices we are prepared to make to see those visions realised. Far too much of the conversation is about what we want to move away from rather than defining a positive vision of what future we actually want for our societies.
 
Decline of books and newspapers
Many publishers are panicking because sales are falling, and some believe it’s because people can read stuff on computers now, where they can get content for free. Certainly they can, but most people who are familiar with IT still prefer to read on paper. Paper is a very versatile technology, and even the very best electronic displays struggle to match any of paper’s many qualities. If it had only just been invented, it would be hailed as a major breakthrough. We have over 80,000 flying hours on computers, and we still buy newspapers almost every day, as well as several weekly and monthly magazines, and buy loads of books, all in paper form.
 
So, it’s too simplistic to blame electronic displays and free content. We think that it’s actually lifestyle and value changes are responsible for most of the decline. There are many components of this. Firstly, today’s society is more inwardly focused, more interested in instant entertainment than responsibility, and there are far more leisure options to indulge this change in values. Given the choice of chatting to friends or reading a newspaper, most people will pick the former most of the time. Secondly, perhaps globalisation has meant that the stuff we hear about on the news is so much more beyond our control now, and therefore of less interest. News can be very depressing, making us feel like powerless pawns rather than encouraging us to get involved.
 
Another interesting reason for the decline, almost in the opposite direction, is ‘Skyglow’. Skyglow is the atmospheric backscatter and fluorescence caused by excess lighting that means that light from stars is washed out. People living in cities today rarely see stars in any number, and very rarely see the Milky Way, or experience the sheer wonder that results from stargazing. It is so easy to forget that we are just a tiny part of an enormous universe. Without this sense of wonder, interest in science has declined generally, and it has also become much easier to become inward looking, focused on those things and people immediately around us, or those on the net or TV.
 
The combination of disempowerment and the loss of wonder are perhaps responsible for a large proportion of the decline in news, while the diversity and richness of other entertainment options accounts for the decline in book reading. The culture of instant gratification coupled to enormity of supply has led to shallowing of depth, where celebrity substitutes for leadership and easy access to multimedia substitutes for the mental effort needed for reading. If this is true, then the decline might continue, but it will eventually level off, simply because paper is still an excellent medium, and because most people will always still value the rewards of involvement and awareness in spite of the many other options available to us. The balance might fluctuate, but the market will remain healthy. The challenge for print publishers is to learn how to leverage web based media to encourage people to read the printed form.
 
Let’s not get physical – the need for new thinking on future public infrastructure
We’ve largely stayed away from working with the UK public sector for the last few years because of an immense frustration of the lack of genuinely innovative thinking about how best to spend public money. Over the last few months we’ve been invited in to talk to various public sector groups and are delighted to say people seem far more ready to consider imaginative solutions. It seems the spending crisis is forcing a radical rethink.
 
Luckily other industries are providing a lead. For example, in the food sector it’s now widely acknowledged that as the global population rises from 6.8Bn today to over 9Bn by 2050, we’ll need new approaches to food production. Two alternatives now being considered for food production are vertical farms and salt water crops. What are the equivalents for the public sector? Well, for a start, why do we need dedicated surgeries for General Practice doctors serving the community? Most are little more than offices with an occasional treatment room with more advanced equipment. The facilities could easily be installed inside schools – with the surgery open before and after school hours.
 
Equally, why do we need to build magistrates courts? With a little imagination these could be run in school halls after the end of the school day. Those attending court would not have to take time off work – benefitting them and their employers. Once we start discussing these ideas at seminars and workshops with people from the public sector, the flood gates open and a whole range of very innovative ideas spring forward that could radically transform the efficiency and effectiveness of public service delivery while removing the obsession with physical buildings as the solution to all problems.
 
Pain measurement
The Sunday Times (June 7th 2009) carried an article about pain measurement, based on work at Oxford University. Fascinating! By looking at the amount of blood flow or neural activity in areas of the brain responsible for the experience of pain, an objective comparison can be made between the magnitudes of suffering in different episodes. It is also likely that it will allow at least some comparison between the suffering experienced by different people. There are wide variety of potentially positive and less desirable applications of such scientific breakthrough and obvious consequences for accident litigation, drug development, and chronic pain treatment. Consider computer games for example. Some games have an element of pain production as consequence of failure, often delivered as minor electric shocks. These could be customised to each individual, so that each player suffers equally, levelling the playing field somewhat between those who experience pain more or less for a given stimulation.
 
In the further future, the body’s nervous system will effectively be just an extension of our IT, as we make links direct to nerves. Stricter regimes might see more scientific approaches to creating pain as a highly effective part of prisoner control. Imagine drawing a line in the sand and telling captives they will experience pain if they cross it. That could be implemented, with a measured pain level enforced, increasing at each offence. Or imagine forcing a violent criminal to experience the same pain that they caused their victim as part of their punishment.
 
Personally we can’t wait until we are able to measure accurately the pain and suffering caused by various diseases, so we can finally put to bed the arguments over man flu, i.e. whether women are actually better at coping with discomfort, or whether they just experience less of it. For Chelsea fans, it would help resolve whether Didier Drogba is genuinely in pain when writhing around the soccer field or just being an idiot! And imagine how pain endurance or bravery based game shows could evolve. Today, we admire those who appear to be brave, but perhaps they just experience lower levels of stimulation. When pain and suffering levels are adjusted to compensate for each player’s response characteristics, we may often find that the supposed wimps are actually able to withstand just as much. Who knows? One thing is certain: being able to objectively measure and compare pain and suffering between people will change a great many aspects of our everyday lives. The main nightmare is what will happen when criminals, terrorists and the health and safety people get hold of the technology.
 
Ian and Rohit on the road
If you’d like to meet with us on our travels, in the next few weeks Rohit will be speaking in Aberdeen, Amsterdam,  Budapest, Helsinki, London and Munich and Ian will be speaking in Glasgow, London, Brussels, Geneva and Chicago.
 
 
What is the Bulletin?
The Bulletin is a response to requests from our respective clients and contacts to provide a monthly update of our current thinking on what’s happening in the world around us and what could shape the future we’re moving into. To book Rohit or Ian for a speech, or discuss your research and consulting needs please contact us at rohit@fastfuture.com or idpearson@gmail.com
 
Fast Future Research
Tel +44 (0)20 8830 0766

Futurizon
Tel +44 (0)1473 710870

The Bulletin, issue no.1

May 10, 2009

By Ian Pearson and Rohit Talwar. May 2009.

The Bulletin – Issue 1

Spending dam-burst ahead
The economic crisis is in large part caused by people uncertain of the future holding back their spending. In the UK, low interest rates mean we get a tiny return on savings. Mortgage costs have not fallen as far, so the gap between borrowing and savings rates has increased sharply. While this should incentivise spending, many are paying off some of their mortgages instead, as the effective return is higher. The trouble is, even those in work are nervous about spending – fearing tough times ahead. The business response is to cut spending and headcounts. With low confidence in government, economic decline is inevitable. So although most are still in work, on the same salary as before, sales are down and companies are going under.
However, this spend reduction means people are building backlogs of things they need. Many will have saved cash, or reduced debts, so will soon be in a better position to go out and spend again. Emotionally, we have also got used to having money and spending and Generation Y (born 198-1999) has limited experience of living in a recession. At some point, the dam of pent up desire will burst and this postponed spending will flood onto the market. Sadly, many companies who so desperately need help now will not survive long enough to benefit.

It is hard to say when confidence will return. Maybe later this year, maybe not till next year. In the short term, savings rate reductions greatly favour debt repayment over buying stuff. The real power lies with those who have no mortgage and accessible savings. Further economic decline means things will probably cost less in the next few months, as companies are forced to offer large discounts. Large purchases are more likely to be postponed if people think they can get them for less later. So for everyone, there is less incentive to spend right now and little prospect of change in the next few months – except for those businesses forced to close before the recovery starts. But this dam-burst is inevitable.

When some of the debt has been paid off, when money is burning a hole in the pocket, and as new technology brings exciting products to market, people will spend heavily again. When they do, the pick up will be rapid. Companies that survive should be more efficient, less wasteful, more innovative, leaner and meaner. The banking system will hopefully have been reformed and better regulated. The economy should be far healthier when it recovers than when we entered the recession and better prepared for the world we are moving into. Well, almost…

Coming Next – Video Visors
This could be the year when video visors make it into the mainstream, probably as one of this year’s must have Christmas presents. Video visors contain displays that allow the wearer to watch video, play games, or browse the web. The first generation will be opaque, so will only be
suitable for when the wearer is seated, but soon, semi-transparent ones will be available, that allow imagery from computers to be superimposed onto the everyday field of view. This will enable merging of the web and the real world, so that characters from games, or friends’ avatars from social networking sites could populate the high street along with ‘real’ people, or even replace real people. This ‘dual architecture’ could give a different appearance to every pedestrian.

Ian’s Rant 1 – Backlash Against the Civil Service
One big fly in the economic ointment is the rapid growth of the civil service over recent years. In many areas, the civil service employs most of
the working population – voters who could in turn favour a government that looks after civil servants. So there is a strong political momentum
associated with improving civil service working conditions. These have gradually become much more favourable than in the private sector, especially as the private sector has been forced to close many final salary pension schemes, and taken the full impact of the recession. Recent
attempts to level the playing field between public and private employment conditions have been very feeble and fizzled out quickly.

Nevertheless, this is the year it must be addressed. Public anger at what is seen as a two stream society, one part living in protected comfort at the expense of the other, is growing rapidly. When the civil service was associated with low pay, it was assumed a reasonable trade off for better job security, low stress, and a nice pension. Now the average civil servant is paid significantly better then their private industry equivalent, gets more leave, takes more sick days, works less hard for fewer hours, and retires earlier on a far better pension. The now all-round superiority of public service terms and conditions is simply not sustainable, paid for as it must be by those working in the private sector. So if the government fails to address the disparity voluntarily, they will be forced to by a fierce private sector backlash. This so far amounts to no more than a number of irate press articles and letters, but it could erupt soon into demonstrations and unrest if left to fester.

Rohit’s Rant 1 – Banking – Bail Out or Black Hole
As over eight trillion dollars in the US and hundreds of billions in the UK are channelled to the financial services sector through a variety of mechanisms, governments try to convince us the taxpayer could profit handsomely from the bail outs. However history is not on our side.
Recent research from the IMF studied 124 banking and financial services failures since 1970. They found that, on average, it takes 3-7 years for a full recovery, the cost is around 13% of GDP and taxpayers get back just 18% of the bailout investment. With – for example – the total assets of the big three UK banks being roughly three times the size of UK GDP, the question is really whether these banks are just too big to bail out in
their current form.

The money poured in to prop up bank balance sheets isn’t being recycled into new lending at anywhere near the rate government expected. One wonders why these deals went through without clear agreement on such basic issues. We’re told – mainly by the banks – that if they aren’t propped up in their current form, the economy will suffer. That horse has already bolted – just ask those losing jobs and closing businesses on a daily basis.

Maybe we need to look at a much more radical restructuring and simplification of the banking system – splitting out consumer banking and day to day business banking from the riskier investment banking, leveraged debt and proprietary trading operations. Ring fencing the toxic wastelands and putting the other sectors under new management might take some time because of the complex structure
of these patently unmanageable behemoths. However, it would allow new investment funds to flow into the safer banking sectors, start to rebuild trust, and get the real economy going.  It would also allow full valuation of the possible scale of bad debt on banks’ books and enable tough decisions to be made about how to share out the losses between all involved.

Ian’s Rant 2 – End of the Greens
Now that everyone is environmentally aware, even if they don’t always act that way, ‘greens’ are rapidly losing control of environmental
issues. This has to be a good thing, since green politics was often thinly disguised socialism. The subscription to environmental protection by almost all parties now allows the issue to be given over to scientists to deal with it.As greens lose their mandate, so meta-religious environmentalists will also lose their haloes. In fact, it is now apparent that many of the earlier policies forced through by environmental groups have actually significantly damaged the environment. Policies such as favouring bio-fuels and carbon trading have done great harm by incentivising destruction of rain-forests and drainage of peat bogs, both of which have increased the amount of CO2 in the atmosphere. With science at last starting to take control, we should look forward to seeing new ideas that will actually help fix the problem.

Rohit’s Rant 2 – How Modern are we?
The two most frequently aired management themes of the last decade have been (1) the need to transform customer service and (2) the imperative to innovate. The most commonly cited enablers have been unleashing our people and embracing the internet and social networks. However, in the current crisis, it seems that while we are still committed to service and innovation, we’re paying scant attention to people and the potential of the internet – if the results of our current survey on Winning in a Downturn are anything to go by.

The survey is still running, but as we stand, the most popular actions are cost cutting (60%), improving customer service (48%) and innovation (40%). Only 17% prioritise either staff motivation or increased use of the online channel and only 8% are spending more on training.  When asked for the top three priorities for surviving the downturn, clear direction and strategy (59%), customer relationships (57%) and cost control (48%) came out top.

Just 24% see staff motivation as a priority and only 3% opted for greater use of the internet. We don’t need data to tell us that unmotivated employees hold back performance – but it’s strange how easily we’ve ignored the people factor when things get tough. I’m also amazed at how many businesses are ignoring the power of the web as a virtually free sales, service and recruitment tool, as a magnet to source new ideas, as a research tool, as an engagement vehicle and a means of driving word of mouth communication.  Given that both motivation and exploiting the web can be done a virtually no cost – this feels like a massive missed opportunity.

What is the Bulletin?
The Bulletin is a response to requests from our respective clients and contacts to provide a monthly update of our current thinking on what’s
happening in the world around us and what could shape the future we’re moving into. To book Rohit or Ian for a speech, or discuss your research and consulting needs please contact us at rohit@fastfuture.com or idpearson@gmail.com