Software revolution, the new industrial revolution !

Monemvasia - Greece

Monemvasia – Greece

This is one of my talks. The inspiration came from this post .The duration was 5-6 minutes so I had little time only for the basics.

Hello Ladies and Gentlemen,

Last week a great event took place. Facebook acquired Whatsapp an application for sending text messages from mobiles. The cost was 19 billions. Yes 19 billions not 19 millions but 19 billions. To have a perspective of this amazing deal let’s compare it in a different context.

The GDP of Greece is 250 billions Euros.
This is the market capitalization of some other well-known companies
American Airlines – $12.3B
Campbell Soup – $13.6
Expedia -$10.2B
Harley-Davidson – $14.1B
Hertz – $11.5B
Marriott International – $15.4B
Ryanair – $15.5B
Starwood Hotels & Resorts – $14.9B
Tiffany & Co. – $11.4B
Whole Foods Market – $19.3B
Xerox – $13.2B

Even microsoft paid only 6 billions to buy Nokia. Nokia was a company with 101,982 people across 120 countries.I produced out of these numbers an amazing number. Each and every employee in whatsapp produced 172 millions dollars each year he worked in this company. This means around 100.000 dollars each hour an employee worked in this company.However I am not here to talk about Whatsapp. I am here to talk about Software and how Software is eating the world. Let’s see how some industries got disrupted by software during the last decade.

Hotels industry – , Expedia, etc
Communication industry – Skype is the largest communication provider company in the world
Apple and Google – 2 software companies have the majority of market in smartphones.
Books – kindle from amazon. Ibook from Apple
TV, Movies, Shows- Youtube,torrents,Netflix
and many many other examples

There is not an aspect of our lives that hasn’t changed because of technology. There is not a single sector that hasn’t been affected by the rise of software industry. We are dealing with a new industrial revolution. The means of this revolution is again the machinery under a different form. Instead of machines we have now software. Software can automate nearly all the information flow in every industry. And also takes a big chunk of the revenues.

This is very very good. We all share every day the advantages of technology.For example we can all upload a video from Youtube or watch something for free. We can all find a cheap hotel or a cheap flight. We can all communicate through skype with people all over the world.We can all buy any book from amazon or any item from ebay.
We all know very well the progress and the benefits of technology. However we must also understand what that progress means to employment. There are millions of jobs that are automated because of the rise of software. There are millions of jobs that are lost every year. What was actually a job for 10000 people it is now a job for a team of 3-4 people. Kodak had hundred of thousands of employees around the world. Instagram has only 20-40 of them. There were thousands of people working in small travel agencies around athens, now there are only 3-4 online travel agencies.

We are seeing the same shift everywhere.We are seeing a tremendous shift in the productivity of people.

“We are not the only people that see now as something similar to the Industrial Revolution with regard to job and social disruption, secular unemployment and rapid adoption of new technologies. What is new this time is that it is happening in every country, every imaginable political regime, every place at the same time. The Industrial Revolution burned through countries slowly: Great Britain first, then Europe, then the US, etc. Here it is all playing out everywhere at the same time. If software is eating the world, it is eating it at the pace of a World War Z Zombie! […] I don’t know what’s going to happen. Nobody does. We need to just keep innovating for a better outcome.

What will happen when there is a true artificial intelligence. For example when software can do any job. A Software to be a Journalist ,a marketer,a politician,a software developer,a salesperson,a carpenter ?

I can think one solution. The purpose of the machine is to free us so that we do something more meaningful. To have a better life – work balance , to make drudgery unnecessary. We must allow the software to achieve it’s purpose. Help our society live in a better world. Otherwise we will live in a state of self-frustration.
The state of self-frustration is that we have allowed technology from a servant to our society to become a master and we have become servants to the technology.

I believe that the producers must share the benefits of this technology with the rest of the society.They must share the profits with the rest of the society. This is also beneficial for the producers because without people’s money software companies will not have any future of making profits. Nothing can be done without a middle class capable to purchase the products and services these companies offer. Companies wouldn’t only have profits they would not even have revenues. I am not arguing for communism here. I don’t believe in ideologies . I am just saying the simple truth. Machines and software exist to assist the purpose of society. We are not here in this life to maximize the efficiency of machines but the happiness of the whole society.

This is the best alternative if we want a more advanced society. A more equal society. It is good for the people , it is good for the rich people, it is good for the middle class, it is good for the poor and it is good for the software producers.

The alternative is again a new industrial revolution and then a new social revolution that will change the way modern capitalism works. I am sure that either way we are going to see a dramatic shift in labour market around the world. We are technologically in 21st century but psychologically in 17th century. We can change that and live in harmony within this new industrial revolution.

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