Japan: the need to reinvent an older society that works!

Over the last 30 years, Japan has transformed itself into a geriatric country with  one of the lowest birth rate in the world at 1.45 children per woman and the highest average age (47) on par with Germany.

At the same time, the country has seen its economic growth stagnate. It is actually a miracle that it is not negative yet considering the fact that its population is now decreasing by over 300,000 persons a year. (The main reason is that the working population between 25 and 65 is still growing slightly.)

Whatever the government does, the trend is not reversible. Free education as was just announced and better care for children cannot compensate for cramped urban accommodations and a low marriage rate. The slight percentage increase we have seen over the last 10 years from 1.23 to 1.45 cannot hide the falling birth rate in absolute numbers.

Most economists often make erroneous previsions based on faulty long term linear projections. But for population, long term linear projections work. In 10 years the baby boomers generation will be on its way out and immigration can't replace it fast enough. The Japanese population will therefore stand at 102 millions in 2050, 20% below its current level, give or take a few millions.

Japan needs a quick and simple solution!

Fortunately, one is available:

Redefining old age!

When the retirement age was decided in the late 19C by Bismark in Germany, it was fixed at 65 as that was considered a ripe old age with very few people living much beyond as this was just above the average life span at the time.

Move forward 150 years to Japan and the picture could not be more different.

Old people everywhere! In the cities, in the countryside, in offices and factories. Driving tractors and buses. But more than anything, young old people, full of energy and strength who simply forgot to grow old! Will they ever retire? Should they?

As all social issues, this is a sensitive subject and it is very unlikely that anything will change short of a major shock to the system. But this is exactly what is coming Japan's way. The sharp drop in fertility will soon be followed by a carving out of the working population, just as the number of retires explodes together with budget deficits. Something must give. 

Fortunately, as we have seen, many "old" people are not old anymore. Marketeers have long noticed that young retirees between the age of 65 and 75 tends to be far healthier and more active than their forebears. More importantly, many are still working, maintaining a higher income as well as a more active lifestyle.

This is not a fluke, it is a trend. A trend that will soon redefine not only aging but working conditions.

Older people do not need to work full time, since usually they already have accumulated capital, nor are they in charge of children anymore. They also often have optimized their living conditions and expenses, prioritizing free time over income.

All developed countries are facing this issue but none as acutely as Japan. 

Interestingly, putting older people back to work is not exactly a new idea. My great grand mother in the Jura mountains straddling France and Switzerland spent the last 20 years of her life to the age of 93 with a caretaker who was 20 years younger and took good care of her, earning a stipend and free lodging in the process. This was common practice then before pensions became ubiquitous.

Japan, especially in the countryside where the problem of aging is most acute has an almost infinite number of available lodging, often approaching 20% of all dwelling in some remote areas. (A little over 10% for the country on average.) This will not revive the countryside but any mechanism which increase the flow of money to villages and remote cities, especially along the coast of the Sea of Japan will be welcome. 

Robots may or may not offer a long term solution. Some people are optimistic on this subject, I am not. Because  what older people need most is human care which is exactly what robots are the least capable of. This will change but not anytime soon and most certainly not at a price most people can afford.

In the meantime, redefining old age will therefore look more and more attractive as a solution. A "sexy" marketing name will help: Young senior or active senior? One last step before aging is definitively made obsolete? 
   

The AI Revolution: Our Immortality or Extinction

Here's a fascinating discussion about the risks and possibilities of ASI (Artificial Super Intelligence) with insights from  Nick Bostrom and Rey Kurzweil.

Article: Tim Urban  
January 27, 2015
https://waitbutwhy.com/2015/01/artificial-intelligence-revolution-2.html

It dates back from 2015, almost prehistory in the field of AI but remains as comprehensive as can be. All potential aspects of AI are discussed in depth including the singularity as well as out of fashion ones such as the "grey goo". Although newer ideas such as the "simulation hypothesis" are of course not included.

What I find most interesting is that in the long list of potential answers, the most probable one, "We don't know!" is not given more thoughts.

ASI is beyond our grasp, in the sense that a 3D sphere is beyond a 2D circle. In this respect, the most telling example is the one of extra terrestrial beings. Statistically they should be there, somewhere, but clearly they are nowhere to be seen. This is a paradox, but only from our perspective.

In reality, the answer is probably quite simple: There are all over the place but are not visible to us. They do not cross the galaxy in interstellar ships, Star wars like, do not communicate with any type of wave we can intercept, do not "expand" across the Universe or whatever we can imagine. It is quite likely that evolution, past the human and civilization stages takes a sharp turn that we do not understand towards new goals we cannot fathom.

Likewise for ASI, it's goals, thought processes and mere existence may be forever beyond our grasp like a tunnel with sharper and sharper turns.

As the article explains, we cannot confine a ASI in a box since a higher intelligence will necessarily find a way out however cleverly we build the box. We will necessarily be outsmarted. Then why even try?

If it is our destiny to build the next level of evolution as seems to be the case, why not accept it and do what we must, comes what may?

Competition in any case gives us no choice: "We" do it or "they" do it!

This was the case with nuclear devices during the second world war. Likewise, the coming conflagration will greatly accelerate whatever progress in AI we would have made anyway if just a little slower.

Evolution as we understand it now under its new variant of punctuated bursts of hyperactivity is but an unending race towards a goal of higher efficiency. Long periods of quiet, balanced equilibrium suddenly broken by unforeseen events creating the conditions for extreme competition, towards the next paradigm where a new equilibrium can be found.

The only difference with AI is that we have no clue whatsoever what such a future will look like or even if we still have a place in it. There seems to be a event horizon in front of us beyond which nothing is visible not imaginable.

It would have been nice to pause and give it some thoughts before rushing in. The laws of nature give us no such choice. ASI is our future, always was. Let's hope for the best.

Trade wars

"There are decades where nothing happens and there are weeks when decades happen!" is a quote from Vladimir Ilyich Lenin but it could as well be a Chinese proverb from ancient time.

Today the markets are stunned that in the end there was no deal between the real estate mogul and the descendants from Sun Tzu who wrote the basics of Chinese military strategy in 500 BC.
 
"The art of the deal" or war by another name?

A quick overview from the BBC
https://www.bbc.com/news/business-48196495

The United States could have spent many more years exchanging paper money against Chinese goods, it cost nothing literally. The arrangement did work beautifully for over 50 years as the Gulf monarchies recycled their petrodollars in US and European assets with no end in sight. Why not China? But of course the Chinese had other ideas. While American corporations invested massively in buying back their own stocks to inflate their value artificially finding no other investment with a better ROI, Chinese companies doubled down on technology to bridge the gap and in some respects, they have succeeded. 

I was stunned a month ago to find out that my Wawei phone did not work anymore in the US. New Chinese 5G technology may represent a menace to America but my "old" Wawei phone? Likewise, the arrest of Meng Wanzhou, CFO of Wawei in Canada in January was an unmistakable message that the gloves were off.

Because the transition from UK to US hegemony between the two world war happened smoothly, there is a false assumption in the West that this should always be so. History says otherwise. The Chinese are doubtless aware of this and preparing accordingly.

In all likelihood they consider that we are already at war. Thanks to nuclear weapons it may hopefully never turn to a hot war but the game is on and the prize will be to secure access to technology, resources and raw materials. (as always) 

Trump considers that China has everything to lose by not negotiating and even threatened that he would be ever tougher after his reelection in 2020. But I am afraid that this is not how China is approaching the "game". We live in a dollar based and therefore US dominated international system. Would the system breaks down, which is a clear possibility, the US has far more to lose and more than any country, should be aware of the risk.

With the silk road initiative, China has started the process of reorganizing the world in a Chinese centric way, nothing less. This too means war by another name.
25% tariff on Chinese goods will only accelerate the process of reorienting the world trade routes. A recession was coming anyway and would have crashed international trade in late 2019, early 2020. It will now be transformative and we should prepare accordingly.

On June 17th, 1930 President Hoover signed the Smoot-Hawley Act which imposed tariffs on more than 20,000 imported goods.
This coincided with the worst economic downturn of the 20th century. U.S. GDP declined 8.5 percent in 1930, 6.4 percent in 1931 and 12.9 percent in 1932.

From a data specialist point of view, I found the market comments over the weekend stunning in their over reliance on data. Listening to commentators, it looks like every twitch and itch of the market is having a direct effect on Trump statements putting him in a stronger position when the market rise and in a weaker one when it falls. Could there ever be a worse approach to negotiating with China which almost by definition is taking a long term approach to the issue? There will be no elections in China in 2020. But by 2030, the country must be number one, whatever it takes!

 In a future post, we will be looking at the impact on Japan, squeezed between its relations with the US and its dependency on Chinese manufacturing. As well as the canaries in the coal mine of international trade in Asia: South Korea and Singapore. 
 

The augmented age of AI

This TedX presentation of intuitive AI is already two years old but it is one of the most powerful concept I have seen on Ted. One which will completely transform the way we live and work in short order.

The video is 15mn. Rather long for a TED speech but well worth the time.


So what will be the consequences of augmented AI?

When we look at AI software today, we are very much where operating software / systems were in the 1970s just before the advent of Windows. If you want to implement a AI solution today, you must build it ad-hoc specifically to answer one problem. It is expensive, time consuming and whereas the AI is supposed to input flexibility related to the problem, the solution itself is everything but flexible.

This is what will change soon. We will see the emergence of out of the box AI, very simple systems at first, which job will be to assist us in taking the right decisions.

The technology is already here for engineering problems because the parameters are usually well understood and easy to model (often because we have a long experience in doing so) as explained in the video with the example of the drone exoskeleton. Less so with soft skills decisions where intuition is more important.

This is where the second idea presented in the video is so revolutionary as it explains an easy way out that almost any company can apply in short order.

Intuition is and will remain one of the most complex nut to crack for AI systems. We will most certainly get there eventually but it will require new breakthroughs beyond Machine Learning and backward propagation. Nevertheless what AI cannot yet do on its own, can be solved with data or rather data feedback.

This is where the IoT with its connected capabilities, but not only the IoT, any system with an inbuilt connected loop feeding back usage information into the designing process, can improve an AI system with the appropriate information, replacing pure intuition with actual usage information.

With this simple idea, we can overcome the "intuition" or "creativity" bottleneck and reset the question as a choice between options generated by the data fed back from the system as explained with the barbie doll example.

This is a new paradigm which changes everything. To make sense and become useful, the data generated by any product, system or service must be appropriately measured, recorded and stored in order to make it accessible to humans, a AI system or both to improve the original input whatever it is.

This is an extension of the original Japanese concept of kaizen (continuous improvement) with the twist that it can be automated and applied to almost anything provided data can be generated.

There is still the concern of personal information (PII) to solve but here in most cases, we are looking at interaction data more that purely personal data as such. This data can therefore easily be anonymized and used for the purpose intended.

Digital trends in April 2019

This article is a snapshot of Simon Kemp's report on global digital trends in 2019
Issued on 25 April 2019
https://datareportal.com/reports/digital-2019-q2-global-digital-statshot

Please follow the link above to read the full report including all the slides.
Bellow is a short extract highlighting the main trends.

1 - The growing role of voice as an interface
obvious in India and China, much less so in japan
2 - The continuing rise of social medias
with Facebook still leading the pack
3 - An analysis of Facebook and the impact of the recent changes

Essential headlines

Global internet users grew by 8.6 percent over the past 12 months, with 350 million new users contributing to an overall total of 4.437 billion by the start of April 2019.

• Social media user numbers have also registered solid growth, increasing by more than 200 million since this time last year to reach almost 3.5 billion by the time of publication. However, recent changes in Facebook’s reporting methodology mean that actual growth was probably even higher, as I’ll explain below.
• There are now more than 5.1 billion people around the world using a mobile phone – a year-on-year increase of 2.7 percent – with smartphones accounting for more than two-thirds of all devices in use today.
• Roughly 98 percent of the world’s social media users – more than 3.4 billion people – access social platforms via mobile devices.  

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Internet use in April 2019

The latest reported figures suggest that an average of almost 1 million people came online for the first time each day over the past year, continuing the strong growth that we saw in our recent Digital 2019 reports.

India accounted for the greatest share of growth in internet users in the first quarter of 2019, with data from the Telecom Regulatory Authority of India showing that the country added more than 44 million new internet subscribers in the first three months of the year.

Perhaps unsurprisingly, the vast majority of the world’s internet users now go online via mobile devices, with data from GlobalWebIndex indicating that more than 9 in 10 internet users connect using a mobile phone.

The growing role of voice

GlobalWebIndex’s latest data show that more than 4 in 10 internet users made use of voice commands and voice search in the past 30 days, but that adoption of these tools varies considerably around the world.

Perhaps most tellingly, the use of voice is most common in India, China, and Indonesia – countries that already have some of the world’s largest internet populations, but that are also experiencing some of the greatest increases in new internet users.

What’s more, despite Western media’s fixation on smart speakers like Amazon’s Echo devices, it’s important to stress that the majority of voice users are making use of voice functionality for everyday activities on their mobile phones.

This is particularly true of younger users, many of whom have not yet developed ‘fixed’ habits when it comes to using digital devices and services. Indeed, the latest data from GlobalWebIndex shows that almost half of all internet users aged 16 to 24 already use voice, compared to less than 30 percent of users aged 45 and above.

It’s also important to recognise that voice is more of a necessity than a novelty for people in many of the world’s emerging economies. 

In particular, for people with lower levels of literacy, and for people who speak languages with character sets that aren’t yet available as smartphone keypads, voice is the default interface for almost all of their digital activities. 

Considering that a disproportionate share of the people coming online for the first time today fall into these two groups, it’s likely that we’ll see voice adoption accelerate in the coming months.

Meanwhile, the desire to achieve economies of scale means that the trend towards increasing adoption of voice in the world’s largest internet populations will likely translate into an imperative for developers to move voice functionality to the centre of the experience for all users around the world – even in developed nations.

Social media use in April 2019

The number of people around the world using social media continues to increase, but – as we noted above – some important changes in platform reporting definitions and methodologies mean that growth figures look a bit softer than they have done in previous quarters. 

However, it’s important to stress that this softness is purely due to those changes in reporting, and it should not be interpreted as an actual slowdown in user growth.

Almost 3.5 billion people around the world now use social media, with roughly 98 percent of them accessing social platforms via mobile devices.

 

Overall, Facebook Inc.’s portfolio of services continues to dominate the global social landscape, while Tencent has further consolidated its lead position in Mainland China.

Facebook

Facebook recently made some fundamental changes to the ways in which it reports advertising audience numbers across its various platforms.

As Facebook states in its Ad Help Center:

“Estimated potential reach is now based on how many people have been shown an ad on a Facebook Product in the past 30 days. We previously based estimates on people who were active users in the past 30 days.” [shortened for clarity]

However, these changes are actually quite helpful: firstly, they enable advertisers to build a clearer picture of the number of people they’re able to reach with ads on each of Facebook’s platforms, and secondly, they provide investors with a better understanding of how well Facebook is ‘monetising’ its platforms’ users.

This second point is a good place to start our analysis, because the new figures reveal some interesting insights into Facebook’s performance as a business.

In its Q4 2018 earnings announcement back in January, Facebook reported a total monthly active user base of 2.320 billion users on the core Facebook platform – i.e. not including figures for Instagram and WhatsApp.

Meanwhile, the latest figures the company is reporting in its self-serve advertising tools suggest that Facebook showed adverts to 1.887 billion of these users in the past 30 days.

That means that Facebook is monetising roughly 81 percent of its total active user base.

However, there are a number of reasons why Facebook cannot monetise all of its monthly active users. In particular, Facebook has a sizeable active user base in various countries where it is unable to sell advertising due to international sanctions, such as Iran, Syria, and Cuba.

But the good news for Facebook is that these changes in reporting appear to have improved the company’s story when it comes to user activity on the platform.

Whereas the company’s Insights tools had been showing steady declines in users’ median number of ad clicks over the past three quarters, the latest data show much healthier figures.

However, changes in audience definitions and reporting methodology mean that these figures can’t be compared on a like-for-like basis to previous reports, so these healthier figures do not necessarily mean that people have actually been clicking on more ads, nor can we be sure whether people have been sharing or commenting on Facebook posts more frequently.

Indeed, the latest insights from Locowise reveal that engagement with Facebook Page posts continues to decline, with the average post now garnering a response rate of just 3.6 percent – a relative drop of 3.4 percent in just the past three months.

Meanwhile, organic reach for Facebook Page posts also continues its relentless downward trajectory, with Locowise reporting that barely 1 in 18 of a Page’s fans now see posts without paid media support – a relative decline of almost six percent in just the past three months.

What’s more, the figures I’ve quoted above are the averages for all kinds of pages and page sizes. Once we focus in on pages with 100,000 fans or more, the figures for organic reach and engagement are even lower still.

However, it seems that Facebook’s decision to throttle organic reach continues to drive the platform’s commercial success, with more and more pages turning to promoted posts to make up for these declines.

Locowise reports that more than a quarter of the Pages that it tracks invest in some form of paid promotion, which would indicate that – globally – more than 20 million businesses now invest in Facebook’s paid media products.