Jim de Bree: The increasing role of disruption

By James de Bree

Last update: Monday, November 14th, 2016

I recently attended an accounting conference in Las Vegas.

I am sure to most readers this sounds like a boring subject. To the contrary, the conference was extremely enlightening – with potentially frightening implications.

The premise of the conference is that mankind has always faced disruption. Disruption imposes behavioral changes.

Disrupted parties fall into three categories. Those who are unable to change are typically disenfranchised. Those who adapt to change manage to survive.

Finally, there are those who innovate as a result of change. Innovators frequently, but not always, benefit from change.

Today, technology is the principal driver of societal disruption. From the closing days of the Roman Empire to the Renaissance, technology did not change much and life, for the most part, did not change either for over a thousand years.

However, the Renaissance led to the Industrial Revolution, which in turn resulted in the technological revolution we are currently experiencing.

Technology increases the rate of disruption and change. Consider that, in 1960, computers were a rarity. We needed to develop computers for our space program.

In 1969, we sent men to the moon with a computer on board. Twenty years later, we developed personal computers that were comparable to the computers used in the lunar landing.

Today, virtually everyone carries a smartphone possessing cyber capabilities dwarfing what was used in the Apollo program.

Those who were around in 1969 have seen change in many aspects of their lives. That change was brought about by new ways of doing things, causing disruption in the environment around you.

We just went through an election cycle that was so disrupted, it made the “House of Cards” television show look tame.

I am not sure which category of disrupted parties our political system is in. Much of the political disruption is the direct result of societal disruption and politicians’ inability to adequately address the associated issues.

Too many people are finding that they cannot adapt or innovate. Consequently, they feel disenfranchised.

Dealing with those left behind may prove to be the biggest challenge of the 21st century.

Future technological disruption was displayed when a presenter at the conference showed how a laptop or smartphone will be able to be your adviser. The presenter used a common laptop featuring an avatar who replaced his secretary.

The device used artificial intelligence to predict the presenter’s future schedule, alerting him to opportunities and challenges he might face, including suggestions for an optimal course of action.

I suspect this software might be available to all of us sooner than we think. We must consider how disruptive this technology will be.

Obviously, the person’s human secretary will no longer have a job. Technology is replacing workers rather than making them more productive.

Another disruptive aspect is that the user of this technology will be better informed and presumably will be able to make better decisions.

This will level the playing field as more people are able to access technology to enhance their decision-making abilities.

Unfortunately, there is also a dark side to technology. At some point we can question whether the decisions will be made by the person using the technology or whether the decisions will be made by the technology itself.

Will the software algorithms become the thought police of George Orwell’s 1984?

Then there is the issue of ethical use of technology by those who control it. Cybercrime is rampant and extremely profitable. Thus the technology, and data gathered by such technology, can fall into the control of the wrong people and be used for nefarious purposes.

I’ll bet members of Hillary Clinton’s staff whose emails were exposed by WikiLeaks are contemplating how disruptive the stolen data was to the election.

Alternatively, the owners of legitimately gathered data can use that data for new purposes. Consider the case of a retailer who collects data on the sale of dog food.

The retailer has a list of everyone who purchased dog food using a credit card. The owner of that information could sell the list to local veterinarians who could solicit business from dog owners.

They also could sell the list to the Department of Animal Control, which could use it to identify people with unlicensed dogs.

Thus the use of data can be exploited in many disruptive ways.

As you can see, instead of another boring accounting conference, the event in Las Vegas was more like a Ray Bradbury seminar discussing some of our most important issues.

Jim de Bree is a retired CPA who resides in Valencia.

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Jim de Bree: The increasing role of disruption

I recently attended an accounting conference in Las Vegas.

I am sure to most readers this sounds like a boring subject. To the contrary, the conference was extremely enlightening – with potentially frightening implications.

The premise of the conference is that mankind has always faced disruption. Disruption imposes behavioral changes.

Disrupted parties fall into three categories. Those who are unable to change are typically disenfranchised. Those who adapt to change manage to survive.

Finally, there are those who innovate as a result of change. Innovators frequently, but not always, benefit from change.

Today, technology is the principal driver of societal disruption. From the closing days of the Roman Empire to the Renaissance, technology did not change much and life, for the most part, did not change either for over a thousand years.

However, the Renaissance led to the Industrial Revolution, which in turn resulted in the technological revolution we are currently experiencing.

Technology increases the rate of disruption and change. Consider that, in 1960, computers were a rarity. We needed to develop computers for our space program.

In 1969, we sent men to the moon with a computer on board. Twenty years later, we developed personal computers that were comparable to the computers used in the lunar landing.

Today, virtually everyone carries a smartphone possessing cyber capabilities dwarfing what was used in the Apollo program.

Those who were around in 1969 have seen change in many aspects of their lives. That change was brought about by new ways of doing things, causing disruption in the environment around you.

We just went through an election cycle that was so disrupted, it made the “House of Cards” television show look tame.

I am not sure which category of disrupted parties our political system is in. Much of the political disruption is the direct result of societal disruption and politicians’ inability to adequately address the associated issues.

Too many people are finding that they cannot adapt or innovate. Consequently, they feel disenfranchised.

Dealing with those left behind may prove to be the biggest challenge of the 21st century.

Future technological disruption was displayed when a presenter at the conference showed how a laptop or smartphone will be able to be your adviser. The presenter used a common laptop featuring an avatar who replaced his secretary.

The device used artificial intelligence to predict the presenter’s future schedule, alerting him to opportunities and challenges he might face, including suggestions for an optimal course of action.

I suspect this software might be available to all of us sooner than we think. We must consider how disruptive this technology will be.

Obviously, the person’s human secretary will no longer have a job. Technology is replacing workers rather than making them more productive.

Another disruptive aspect is that the user of this technology will be better informed and presumably will be able to make better decisions.

This will level the playing field as more people are able to access technology to enhance their decision-making abilities.

Unfortunately, there is also a dark side to technology. At some point we can question whether the decisions will be made by the person using the technology or whether the decisions will be made by the technology itself.

Will the software algorithms become the thought police of George Orwell’s 1984?

Then there is the issue of ethical use of technology by those who control it. Cybercrime is rampant and extremely profitable. Thus the technology, and data gathered by such technology, can fall into the control of the wrong people and be used for nefarious purposes.

I’ll bet members of Hillary Clinton’s staff whose emails were exposed by WikiLeaks are contemplating how disruptive the stolen data was to the election.

Alternatively, the owners of legitimately gathered data can use that data for new purposes. Consider the case of a retailer who collects data on the sale of dog food.

The retailer has a list of everyone who purchased dog food using a credit card. The owner of that information could sell the list to local veterinarians who could solicit business from dog owners.

They also could sell the list to the Department of Animal Control, which could use it to identify people with unlicensed dogs.

Thus the use of data can be exploited in many disruptive ways.

As you can see, instead of another boring accounting conference, the event in Las Vegas was more like a Ray Bradbury seminar discussing some of our most important issues.

Jim de Bree is a retired CPA who resides in Valencia.

About the author

James de Bree

James de Bree

  • tech

    An interesting colum, Jim.

  • indy

    It’s interesting that so many believe technology will save us but it’s creating more problems.

    From manmade chemicals that won’t break down in nature to filling up canyons with technological waste.

    And technology innovations that might help us grasp the reality we face are often ignored if they don’t meet existing folklore norms that no longer map to the modern world.

    But the bigger issue in play here is the lack of sustainability between population growth and resources.

    Most older economist see more people as more economic growth . . . even if it ignores the basic concept of economics . . . that being ‘scarcity’.

    Many of the resources that we rely on today are dwindling based on increased consumption from population growth.

    The oil that’s been in the ground for tens of millions of years is being pumped out in a ‘geologic second’ . . . yet there’s no discussion of how the additional 75 million net humans added to this ‘fixed rock in space’ are going to do without this cheap source of energy (excluding the environmental costs like climate change for sake of discussion).

    Even here in CA we’re over pumping our water aquifers unsustainably (see LA Times for areas of CA where the ground is ‘sinking’) with the ‘hope’ some new ‘technology’ will help us . . . versus the reality that better pumps extract the water faster depleting same.

    So the Op-ed author does make a good point that many people, mostly older folks, can’t come to grips with the actual reality we face.

    We saw this in the last election where many people I know said simply ‘throw Trump in and see what he does’ . . . versus leveraging the knowledge we gained over the last 100 years that could have been used to grasp that many of Trump’s promises are simply not obtainable.

    The most important one is the issue of off shoring jobs . . . created by the same unsustainable global population growth that has flooded global labor markets driving wages down creating the motivation to move jobs to the nations with lowest wages. Consumers here in the US ‘favor’ this by buying products and thus sending the most powerful economic signal . . . money . . . as a confirmation to continue off shoring to reduce prices to those Americans that can still afford to buy something pending their job being either off shored or seeing their wages continue to stagnate.

    I wish our future was as simple as simply tracking down dog owners without licenses for same . . .

    The resource data being acquired globally that suggest a path to sustainability is sadly just ignored if it doesn’t map to someone’s existing ideology, beliefs, or folklore . . . so the technology gathering the data essentially provides no value . . .

    In any event, I suggest exploring sustainability and grasping a strategy that will remove frustration by informing the public to the economic reality ahead:

    http://www.steadystate.org
    http://www.worldwatch.org
    http://www.populationconnection.org
    http://www.earth.columbia.edu/sections/view/9
    http://www.postcarbon.org

    • tech

      “MIDLAND, Texas (AP) — The U.S. Geological Survey says it has discovered in West Texas one of the largest reserves of recoverable oil in the agency’s history.

      The agency said in a release Tuesday that the Wolfcamp Shale geologic formation in the Midland area contains an estimated 20 billion barrels of oil. It’s also estimated to hold 16 trillion cubic feet of natural gas and 1.6 billion barrels of natural gas liquids.

      Officials say the discovery is nearly three times larger than the recoverable oil found in 2013 in the Bakken and Three Forks formations in the Dakotas and Montana.

      More advanced drilling, such as hydraulic fracturing, would be needed to reach the oil. The shale is within the Permian Basin, one of the most productive regions for oil and gas in the U.S.”

      http://www.washingtontimes.com/news/2016/nov/16/vast-field-of-recoverable-oil-natural-gas-found-in/

  • phil ellis

    Windy, I don’t think that “Too many people are finding that they cannot adapt or innovate. Consequently, they feel disenfranchised.” equates to “So the Op-ed author does make a good point that many people, mostly older folks, can’t come to grips with the actual reality we face.” Also, I don’t think it is the “older folks” who can’t come to grips with reality, rather those younger folks marching in the streets saying that they don’t need to accept reality. The generation that invented facsimile and Xerox machines seems to be quite adept at using today’s technology (let’s not discuss programming VCR’s – fortunately, that is an outdated technology).

  • Ed Shalom

    Good intro to improvements of technology, and the issues they raise. This phenomenon is not new, but the scope of these changes, and the acceleration thereof (try Googling Moore’s Law) is speeding up.

    As a simple example, consider the following:

    Number of men that would be required under the different methods to till the soil for the production of the 1928-29 yield of wheat in the United States. Here are the figures:

    By the ancient method of spading………..6,000,000 men
    With ox-drawn plows……………………1,000,000 ”
    With Oliver single-bottom plow of 1855…….500,000 ”
    With modern 60-disc tractor plow……………4,000

    The same trend applies to steelmaking and the auto industry in the past century.

    As such, our society is being misled by the simplistic idea that we can jigger global markets to restore steelmaking and car making jobs to the Rust belt: if modern plants were built in the US, they would only require a fraction of the jobs lost to technological change.

    The key elements required to foster innovation in global markets requires knowledge supplemented by logical analysis. These ingredients are obvious in the computer advancements Jim cited. Unfortunately, the sense of loss by blue collar workers in the US is devoid of knowledge of the changes in manufacturing, and devoid of the application of logic. It is as though a mob with pitchforks attacked a modern farm that was replacing plows with tractors, due to the loss of jobs.

    Unfortunately, the US is now doomed to go through a senseless and disastrous experiment, motivated by ignorance, fear, and anger. When this happens, the mob with pitchforks will rightfully turn upon the false prophets who led them into a catastrophe.

    • tech

      Don’t you think you’re being rather harsh on Indy, Mr. Shalom? It’s true he doesn’t understand it’s automation and not off shoring that’s primarily responsible for the reduction in blue collar manufacturing jobs. Perhaps you can walk him through your wheat cultivation example.

  • Indy, you stated the following: “And technology innovations that might help us grasp the reality we face are often ignored if they don’t meet existing folklore norms that no longer map to the modern world.”

    For clarity, could you provide a couple examples of what you are referring to. Thanks.

James de Bree

James de Bree