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As our view of technology’s impact seems to be growing increasingly darker, Kleiner Perkins partner Mary Meeker arrived just in time to soothe Silicon Valley’s battered ego.
Meeker presented her annual Internet Trends Report in late May at the Code Conference, and it stretched to 294 slides this year. The presentation remains eagerly anticipated, thanks to the wealth of data it packs.
But there is data, and then there are the conclusions drawn from the data.
Throughout the presentation, Meeker drew the kind of conclusions that serve as an affirmation of how Silicon Valley sees itself and how it wants the world to see it:
Technology is the answer to all of our problems. Now, please get out of our way.
“While it’s crucial to manage for unintended consequences, it’s also irresponsible to stop innovation and progress, especially in a world where there are a lot of countries that are doing different things,” she warned European regulators at one point in her talk.
She began the presentation with a rather optimistic spin on what would seem to be a serious dilemma for the industry. Smartphone sales are flat? Growth in internet adoption is slowing. Yikes!
Hey, no worries, because tech companies are getting more out of the people already online and using smartphones. People are spending more time on their gadgets and on the internet. Messaging, media, ecommerce, payments, Wi-Fi networks … all are on the upswing. And now voice-enabled devices are blossoming.
“A lot of people ask the question about internet usage, ‘How much is too much?'” Meeker said. “Our view is it depends on how that time is spent. One of the things I feel really strongly about is there’s a lot of innovation and there’s a lot of competition, and that’s driving a lot of product improvement and a lot of usefulness and a lot of usage and also a lot of scrutiny.”
A couple of weeks after her appearance, Apple acknowledged the issues of technology addiction and worries about the use of personal data by introducing new features to limit both. But for Meeker, the takeaway is quite clear: Innovation is making digital experiences better, and so naturally people are using these services more.
As for all the personal data that these services are hoovering up: Chill. Meeker notes that this leads to more personalization and better consumer experiences … which leads to more usage, which generates more data, which leads to better monetization by companies such as Facebook.
“With personalization, data improves engagement and experience and drives growth and scrutiny,” she said. “Personal collected data provides better experiences for consumers. People putting data into these products make their products better.”
For Meeker, this creates a “privacy paradox.” These companies are making people’s lives better, and people are loving it, but government regulators are freaking out and trying to restrict how that data is used.
Meeker does acknowledge that companies like Facebook need to think about “unintended consequences,” but then she switches almost immediately to explaining how Facebook’s model is driving its revenues and engagement through the roof. The implication seems clear: These innovative companies risk being punished for being too successful.
Meeker then wades into what seems like some pretty awful economic indicators — perhaps best summed up by this slide:
Holy understatement, Batman! Household debt is setting records, in large part thanks to student debt. Personal savings are plunging. Debt to income is soaring. People are having to spend more of their income on shelter and health care. We’re spending less on food, entertainment, and clothing, Meeker reported.
But hey, good news: Ecommerce and the internet are making everything cheaper! So we’re all good!
Meeker spent a lot of time hailing a golden age of ecommerce, in which a virtuous cycle of more personal data is creating more personalized shopping experiences, which is leading to more buying online, which is leading to more efficiency, which is leading to lower prices. Shopping and entertainment have become intertwined, she said, mentioning only in passing that physical retailers, a massive source of taxes for local governments and employment, are being crushed.
Any guesses as to what the best hope is for physical retail?
Meanwhile, she explains that part of the reason our spending on shelter is going up is because people in the U.S. are buying bigger homes, on average, even as we have fewer people living in them. With personal incomes stalled, Meeker thinks there is a great solution out there:
Airbnb to the rescue!
“To contain spending, many consumers may aim to increase the utility of space they have,” she said. “We just provided examples of how some consumers are doing this — Airbnb provides income opportunities for hosts.”
An even bigger bummer is runaway health care costs. Meeker notes that health care spending in the U.S. is “increasingly shifting to consumers.” They now pay 18 percent of the cost versus 14 percent in 1999, a situation largely driven by growing deductibles.
“When customers start spending more, they tend to pay more attention to value and prices, especially with things like the internet,” Meeker said. “Our question is, ‘Will market forces finally come to health care and drive prices lower for consumers?'”
So the rising prices are actually good news because they will lead to more market-driven thinking by consumers who will turn to … the internet! More data and more “consumerization” of health care: Will it ultimately stop soaring costs? Fingers crossed!
Finally, Meeker wants you to stop worrying about the impact all this disruption will have on employment and learn to love it. She spends several slides pointing out that, hey, new technology has always turned industries upside down.
“Will technology impact jobs differently this time?” she said. “Perhaps, but it would be inconsistent with history, as new jobs and services, plus efficiencies, plus growth typically are created around new technologies.”
On a macro economic scale, yeah, it’s all good. Maybe. Probably. This ignores, of course, the personal scale where people’s lives are upended when their company closes, or economic regions (Hello, Detroit and Akron!) are ripped apart when an industry collapses. And it dismisses the growing anxiety people across the economic spectrum feel. (See: the election of President Donald Trump.)
She noted that even better news is “job expectations that are evolving.” And she explains why there is no need to worry about money. “The most desired non-monetary benefit for workers is flexibility,” she said. “Technology makes freelance work and other forms of work easier to find. Freelance work is growing 3 times faster than the growth of the total workforce.”
This will allow us to all make better use of our “underutilized” assets and skills. Never mind about job security, paid vacations, and other such outdated analog notions. Everyone will be master of their economic domain, and it will be wonderful, thanks to Etsy, Uber, Amazon Turk, Airbnb, and all sorts of other digital marvels.
This is Silicon Valley’s shiniest image of itself, forging new paths in a world where faith in the inevitable march of technological progress remains intact. Even as people and governments have been begun to profoundly question the role digitization plays in our lives, Meeker’s presentation offers a balm to the true believers.
Is technology making us happier, healthier, smarter, more secure, and more economically sound? In the remarkably persistent utopianism of Silicon Valley, where doubters are considered enemies of the future, the answer is always and emphatically: Yes.
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