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Peter Cochrane's Uncommon Sense: Short-Termism Of The Worst Kind
Have we suddenly lost 60 IQ points?
As I watch the actions of companies and governments it often seems that our species has lost the ability to do joined up thinking and economics. Have giant corporations and governments thrown away 60 IQ points along with the ability to make rational decisions beyond simple-minded, up front or face value costings?
All companies and organisations face difficult choices and crisis conditions that sometimes lead to limited options and odd decisions. Large and small, they all make errors and suffer from the mistakes of others outside their control. But there is no excuse and no place for short-term stupidity and muddled thinking that damages the long-term operation and viability of any group.
At home the same individuals think long-term and paint the house instead of letting it rot, service the car rather than risk an accident, pay for children's education rather than rendering them unemployable later. But what do these same people do at work? Hold back on investment to secure short-term gain or favour, to secure their position and that of their team - and all at the expense of the whole and the future. They will neglect buildings, other infrastructure, services and people training, focus on the trivial and generally screw up. How come?
All healthcare systems are reeling under increasing demand and pressure from aging populations that expect to live forever, and implant technologies have become a big deal. In a recent report on chip implants for Parkinson's and related diseases it was argued the $30,000 per patient necessary to affect individual repairs is too expensive. So every year thousands could be rendered virtually useless to society, condemned to an undignified end, at a massive opportunity cost to their families, friends, companies and nation.
Apart from humanitarian considerations, each patient will dissipate at least $50,000 of resource between disease onset and death. Add to that the lost productivity through an inability to work, the cost of continued sibling support and distraction, and it is obvious the economics of denial make no sense in the long term.
This is all made even more incongruous by the allocation of far greater funds to support those with self-inflicted injuries and diseases through drug abuse, alcohol and tobacco. Here there is little or no chance of a social or financial payback and even less chance of a technological solution. And the entire decision base is generally humanitarian and social rather than economic. But it is the same body making the decision.
The media coverage of Anthrax in the US and CJD in the UK would have us believe we face problems of epidemic proportion and millions have been spent trying to contain the potential threats. But both are relative non-events with only hundreds of lives in danger compared to the thousands of certain deaths attributed to influenza.
At the other end of the spectrum hospitals seem to have forgotten the basic hygiene lessons of Lister in 1865 and decided money can be saved on cleaning contracts. So dirty hospitals claim the lives of over 100 people per week prematurely dispatched by MRSA and other infections. And our war chest of antibiotics continues to be depleted by overuse and abuse.
People continue to be tragically killed in unnecessary railway accidents. Did somebody decide not to invest in safety checks, new tracks, signaling equipment and rolling stock in order to save on the operating costs? In some cases the net result of such deaths is billions lost in national productivity and commuter time, with track repairs far exceeding the original savings.
How strange that we kill tens of thousands a year in road accidents and often fail to invest more than petty cash on the repair, maintenance and expansion of the basic road infrastructure. They say speed kills but mostly it seems to be bad roads. So will we see government officers charged with the equivalent of corporate manslaughter? I think not.
The dot-com boom and bust, the stalling of the new economy, has largely been brought about by a basic lack of bandwidth. Yet the 3G mobile licensing fiasco saw the EU telecoms industry raped to the tune of over E100bn. If only E50bn of that money had been made available then every EU home and office could enjoy optical fibre bandwidth that would transform economies.
Much of Silicon Valley and California have in recent times been zoned for power cuts. It was all brought about by the deregulation of the power industry, the non-cost effective activity of peak loading displaced by corporate greed. The Enron and WorldCom debacles implicated - and in some cases brought down - other big names in the consulting and financial sector. Was this entirely down to executive and corporate graft or was it largely ignorance and blindness coupled with a complete focus on the short-term gain? The list goes on.
Who is to blame for all this? How did we become so blind and dumb? I suspect it is down to complexity and dispersed responsibility. We have deployed technology that speeds up our communication and ability to enact decisions without investing in models and aids to visualise and understand the outcome. We have just not invested in appropriate management tools and systems.
It is not that they don't not exist but more that we have not understood or valued technology or change. The way we are running modern government and business is almost like trying to fly a jumbo jet with no instrumentation and the blinds down. Dickensian thinking will not work in a world of Star Trek technology.
Compiled at home after a very long week trying to get the right decisions made inside a large client operation with a host of conflicting demands and requirements. Despatched to silicon.com from a coffee shop in Ipswich on a busy Saturday afternoon using my G4 laptop and GSM mobile phone.