For this year's Labor Day coverage, The Cipher Brief revisits Carmen Medina's discussion of "Essential Knowledge." Medina's discussion of internet trends is crucial knowledge for every business and government leader preparing for the future.
About 15 years ago, I stumbled across a powerpoint presentation called “The Internet Report.” It was a homely document issued annually—just basic bullets against a plain background with the occasional rudimentary chart. I remember the charts containing sharply angled lines—trends of all types quickly accelerating either upwards or down. The ordinary nature of the presentation belied its magical content. It documented the revolution then well underway that would soon overturn many, if not most, social norms and undermine the capabilities of government.
In 2005, for example, the report stated that the major internet companies were building out infrastructure designed to “organize all the world's information and make it universally accessible and useful.” What a different world that would be, I thought at the time. How would government, society, and individuals interact in an environment of ubiquitous information? All I knew for sure was that most legacy organizations had not even begun to contemplate the possible ramifications. And that the age of the super-empowered individual was upon us.
The Internet Report became a must read for me every year. Its author, Mary Meeker, is a legend in Silicon Valley. The trends she documents and the ideas she finds compelling are essential knowledge for individuals who want to understand the world as it is becoming. The 2016 report just came out, and here are some of my key takeaways:
The Internet Revolution is decelerating. Except for India, the world last year did not add many new users to the 3 billion that were already accessing the internet. But the growth in India is remarkable; almost 100 million new users joined in the past year. Similarly, smart phone user growth is slowing. These two trends suggest to me that most societies and economies may already be experiencing the most destabilizing impacts of the internet revolution. It's volatile and turbulent now, but it may not get much worse. Admittedly—and perhaps unadvisedly—I'm assuming a linear relationship between internet access and social disruption. I think I'm on much firmer ground expecting the unexpected in India, where new segments of the population are now experiencing the empowerment of knowledge.
Population Growth is ending. Mary Meeker joins just a handful of other prognosticators in paying attention to what I think will be the biggest issue of the second half of this century—flat and then declining global population. As she points out, the overall world population growth rate currently stands at 1.2 percent, versus 2 percent 40 years ago. And global births have been declining at a 1 percent annual rate for several decades. She makes the intriguing point that our current, historically low interest rates may reflect an implicit understanding that the days of sustained economic growth are over. Economic and population growth have been constant correlates for the last 200 years. But by the second half of this century, the very concept of economic growth will need reevaluation—a task which many governments are likely to fumble. A premium will be placed on smart decision-making; societies will no longer be able to count on rising tides lifting all boats.
China's Transformation is even bigger than we think. Three facts jump out from Meeker's presentation. China and emerging Asia are the principal drivers of the global economy, accounting for 63 percent of the world GDP in 2015. China alone contributes more than a third. Second, China's embrace of social media compares favorably to that of the U.S. The almost 700 million Chinese internet users do many things online—they connect, they book on-demand transportation, they use digital wallets. It's as if Chinese citizens are skipping all customary stages of economic development and instead scaling directly from subsistence economy to digital economy. The third fact may seem trivial, but it's not. China is now the world's largest spender on outbound tourism, surpassing the U.S. Of course there are four times as many Chinese as Americans. But still, many millions travel outside their country on a regular basis—the U..S alone hosts two million Chinese tourists a year. What this all means for China's future is of course the most intriguing question. No other country has even come close to experiencing such a complete metamorphosis in such a short period of time; there are no analogies, no political or social models upon which to base expert predictions.
The Internet Report should be required reading for all serious students of international affairs. Focusing on the affairs of nations and governments can blind us to the changing human condition, which is of course the principal driver of societies. Fifteen years ago, I looked forward to individuals gaining more control of their lives and more independence from government as a result of the internet revolution. But I didn't quite anticipate how the internet would also empower the darkest motivations of humans. The building blocks of our future lives are being laid today—artificial intelligence, virtual reality, genetic engineering. The brick masons are not governments and world leaders but private citizens with scathingly brilliant ideas. Follow them.
