The outlook for 2013.

Revenue Innovation, the sky is the limit, but there are now very few barriers to entry.

So what does this mean? Industry polarization in 2013 will be enormous.

It means the following; The Internet and price shopping destroys jobs, whilst it creates some it kills more. The Internet is the greatest job killer in the world today and probably in history. The new jobs it creates go to far fewer people and in many cases the new jobs created then ensure a lower standard of living for the have not’s.

This is what scares Washington more than anything else and this is why last year we saw the US Fed link monetary policy to unemployment rather than inflation.

A lot of banks in the US aren’t making small business loans even when there is good collateral. It’s not because they are worried about regulations it’s because they are earning money doing nothing IE they don’t have to pay any interest on deposits.

Remember late last year the Japanese authorities lifted their inflation band from 2% to 3%, a 50% rise and promised more stimulation.

In 2013 prepare to be stimulated more than you can imagine.

The year 2013 will see the gap between the haves and the have not’s continue to widen in Western economies, and it will only get worse as the lack of barriers to entry destroy companies, industries and with it go the jobs.

The Internet takes product direct to market and eliminates swathes of middlemen and associated industries.

If the truth be known you are probably partly responsible for the loss of a job of one of your friends, acquaintances or their family members.

As noted in his book; No Barrier; How the Internet destroyed the world economy, by Bob Brill.

“In 1970 for example if you wanted to buy a record album the way you went about it was simple. You went to a store, asked a clerk (employee) where the latest Beatles album was. He walked you over to the section where Beatles held sway. You then walked up to the register and handed it to a cashier (another employee) who then rang it up and put it in a bag.

Now how did it get there? The record company agent (employee) signed the Beatles, did all the publicity through their public relations department (employees), hired a producer (employee), printed the albums (employees), sales people (employees) sold them to distributors (employees) who then sold them to record stores (employees) who had the clerk (employee) stock the shelf, help you so you could buy it at the register from a cashier (employee) who would put it in a bag which was made by more people (employees). And don't forget the United States Postal Service who handled and delivered the mail and there would be about five stops along the way from the USPS. 

No less than 15 different stops were made along the way from the singers to you walking out of the store with merchandise. That is 15 different people who were employed by somebody and who had a job, which they were paid to do. This does not count the redundancy in some of those departments so realistically there might be another 10 or 20 people involved but we will keep it simple. 

Today a band decides to record a song. They get together with some quality programs on their computer and cut the song in their garage. They clean it up and make is sound really great on their computer. It may even be one singer using a program such as MXL Professional and creating all the music he needs on his home computer. I've done it myself and I'm not a musician. I did it for a video based on the Elvis song "Heart Break Hotel" which I put together to draw attention to the homeless.

Next the singer puts the song on YouTube for free and it goes all over the world. People download the song for free if they like it and maybe put it on their I-Pod or I-Phone. It went from singer to consumer directly and no one paid a dime for it. Oh it also bypassed at least 15 people who no longer have jobs because of the Internet delivery system. Oh, and nobody made a dime on it either. 

The music industry isn't the only prime example. Every Mum and pop retail store is affected by the Internet and the loss of jobs it creates. The Internet is not a job creator nor does it make things easier for people in business necessarily. It does improve efficiency because it cuts costs, employees specifically. If you don't need a distributor, a clerk, a cashier, a salesperson or anything more than a computer and a delivery system, why would you hire them”?

Luckily the human mind has no physical limits. Imagination and creativity run as far as a person wills them to go. Computer software can doubtless go toward far greater use if it, too, frees itself from space and time.

Therein lies the promise of cloud computing.

Computational power that is infinitely vast and ubiquitous.

Forward-thinking organizations and businesses have begun exploring cloud computing in earnest, and many more appear poised to join them in the year ahead.

They and we can hope for great things to follow.

As customers shift their behavior computer infrastructure will need to be flexible and scalable just like us.