Opening
The last time I got a feedback, my topic is too
educational. So today, I would like to pick up a more relaxing topic, which
is Economics!
Do you know there is a big thing happening in the world economy? Right now,
right here, world economy has been changing like a crazy. And traditional
corporates are facing serious challenges. I would like to share what is
the ground shaking.
Body
MRT. Train operations, ticket sales, ticket checking,
and announcement. All are automated nowadays, no human. Why we use technology instead
of human? Because they do not need salary! Look at MRT, what is the
additional cost to allow one additional customer to ride on a train? The
additional cost is very marginal, because it is automated. The cost to produce additional unit of
output/service is very marginal. And you may be able to provide the additional
output/service for free, if already a sufficient number of customers.
Take another example. Taxi. We all know that taxi fee
is the same, regardless of one customer or two customers. Why? This
is because the marginal cost of the additional one customer is negligible. This
means, when you drive, if you can find a person sharing the same destination at
the same time, then you can give a ride to the person and earn additional
money. And nowadays, it is indeed possible to find people, sharing the same
destination at the same time, by using smart phone. In this way, taxi
companies cannot compete pricewise with you, because you will go to the
destination with or without the sharing of the ride.
Banking industry. One
cent costs nothing for each individual, then if we can aggregate one cent from
millions of people easily and it can be a pool of lending with no interest.
This aggregation will be possible with the advancement. Can traditional
banking make a business with no interest? No, because traditional banks need to
pay dividends, salary, expenses.
The advancement of IT is very fast. The Internet has
becomes faster from analogue line to Optical fiber by more than ten thousand
times. iPhone CPU has becomes faster by 50 times from the first iPhone to
iPhone 6 in the past eight years. PCs are getting smaller. We have
desktop PC, and moved to laptop PC, and now stick PCs , the same size as USB stick
. All of these advancements allow us to utilize our idle time & idle
resources more easily, and posing great challenges to traditional cooperate
profits.
Closing
If no additional cost, then price can be zero for additional
unit of an output. And if we can aggregate each individual’s idle time, or
fully automated, the additional cost can be zero. IT technology advancement makes these only
easier and it poses great challenges to traditional corporates. And there are
already so many names to this new economy, such as, sharing economy,
collaborative economy, zero marginal economy, and sharing economy. You can name
it.
