Thalidomide and the Children of Social Media
Note: I am not an expert in the field of Sociology or Mental Health. The following views are simply my own personal views shouldn’t be taken for gospel.
To be very specific: society is facing a challenge where the technological products we use come with wider unintended consequences. It’s not to say that we’re being mis-sold faulty products, but rather, evidence exists that we simply don’t know the limitations of what some products offer. Consequences are being felt years after the introduction.
In other words: Tech is the new Thalidomide.
At first, thalidomide seemed to work great in curing morning sickness but the disastrous consequences of this medication were only only apparent when children were born with awful defects. Yes, it’s a strong statement to make, but if statistics show that our kids are unhappier and unhealthier than before, what else can we conclude?
Below, I show that happiness levels are at an all time low. I show that the rise of technological progress has been married with a decline in overall well-being. I show that an increase in neurological problems (e.g. ADHD, anxiety, stress etc) have become manifest during the rise of social media with little extra benefit to consumers.
It’s evident from first-hand experience that we’re quite stressed when we’re tagged in unsightly pictures, but research from the Pew Institute has validated that Social Media is shown to drive psychological stress however the impact of technology doesn’t end there. The products we use (Laptops and smartphones) are seen to be so addictive that its effects are comparable to the addictive nature of drugs.
Spoiler alert though, when you look at data the right way, the relationship is clear here. Things are not heading in the right direction.
Follow the Money
Silicon Valley has moved a long way away from keeping the focus of the consumer to be the product. The competitive landscape has been driven by the amount of money that’s flowing through the economic system which is why now, every person who’s moderately rich will gladly take advantage of tax breaks to invest in technology. The current potential for growth and seriously high profit margins can be exponential given that at no time in history have companies been scaling this fast.
Incubators are not there to support consumer rights
Incubators exist with the sole purpose to generate returns for their investors via their mandate, which is generally to invest in start-ups at the seed level stage. They do quite well in this as the general incubator has the following investment thesis: they get first pick of the litter by offering 10% of the business at around $100k (valuing a start-up with no product or revenue at $1m) and 3 months later will help raise about $1m for the next 10–20% (valuing it at around $5-10m), which generates them an unrealised profit of their initial investment by a cool few hundred thousands. On balance, the probability that one start-up in a litter reaches Series B (where you can begin to realise some of your gains) is high enough to maintain the incentive, resulting in tech incubators being two dime a dozen.
With easy investor money, we can use the number of iPhone applications are on the app store over time to proxy that a lot of startups are being launched:
However, and oddly, you would think with more money (and lower rates), the survival rates of early stage companies would be rising? Wrong.
Back in the year 2008, the ratio of Seed to Series A companies was 1:1 according to this data from TechCrunch. However more recently, the number has been significantly lower — about 5 times lower. This is counter-intuitive because with lower interest rates, the opportunity cost of investing into a start-up is less risky so investors can hold a losing trade for longer — but the evidence says they don’t.
This is because with more money, investors take more bets (instead of bigger bets) — and more bets means more start-ups, meaning more competition. However, more competition means it’s harder to succeed.
These ‘moon-shot’ start-ups are trying to become unicorns to satisfy their investors but the proportion which are succeeding is falling.
This leads to two discussion points.
- Why are investors continuing to invest if the chances of finding the next unicorn are reduced?
- Why are more of these start-ups failing and how are they trying to improve their own chances?
The answer to the first question is quite simple as it has a mathematical rationale. Financial incentives remain high for Investors because
(a) Interest rates are so low that riskier investments are worth doing (the opportunity cost is really that bad)
(b) Tax breaks make these riskier investments a lot less risky and
(c) Probability is still on the side of the investor in that enough start-ups still become unicorns (or at least, large enough to return a sizeable reward) such that it keeps them in business.
Now this moves us onto the second part of the question which is a lot more difficult. As start-ups are fighting harder than ever to plant their stake, are consumers being left short changed in all of this? Or are start-ups developing
Have consumers benefited from the technological revolution?
Well this is also subjective because in economics,
homoeconomicus wants to maximise utility but what do humans actually want? Is it happiness or is it monetary?
As an example, I can now contact my friends a lot quicker than in any time in history but Instagram have also been watching me doing it…is that fair? Is that what we want? I can also express myself and connect with people all around the world in under 140 characters, but does it stress me out? I can search for jobs quicker than before; but does that mean I find a better fit?
Or are these problems a natural consequence of technological progress, so let’s just live with it till the system balances itself out?
Let’s begin at the beginning, the number of people who use the internet is ginormous and has been growing substantially:
and the rate at which technology is being adopted globally is at the quickest pace ever. It took almost 30 years for people to fully use cars and the radio: but smartphones and social media took less than 10 years for the more than 60% of the US to adopt them:
This adaptation has led to a few things: firstly, we’re spending about 2 to 3 hours on social media a day:
where around 89% of OECD 16–24 year olds are on it in some shape or form — so basically everyone:
But where have we found an extra 2 to 3 hours a day? Humans are generally awake for 14–16 hours a day and we’ll work or go to school for 8 of them, which implies something of the remaining 6–8 hours has been seriously sacrificed, but what?
One idea is that we’ve just rotated from watching TV to going onto the internet:
Which seems to be true. However the following indicates that we’re actually sacrificing a bit of everything:
So given how much our parents told us off for watching too much TV as kids, it’s no surprise that this study specifically highlights that increased TV time led to a degradation to cognitive performance.
Moreover, the increase in aggregate time spent on technology means that we’re still leaving a lot of our favourite hobbies behind. So this begs the next set of questions:
- Is technology so good now that it’s just more fun being engaged in the cyber-world than how we used to spend it with our existing hobbies in the real world?
- Or is marketing just so good these days that technology companies are making these applications irresistible?
It’s easier to ask for permission than forgiveness
Growth tactics in technology are diverse but generally product specific. They range from techniques to manipulate behaviour through internal triggers (by creating a gambling like environment) to external triggers (by viewing adverts in your search engine).
However, some marketing methods (like adding a bit of sex appeal) are seen to be unilaterally accepted but in reality, it’s of no difference to the behavioural manipulation we often see in tech today.
Either way the
FOMOfication of technology has rendered consumers at a disadvantage — we’re not able to make decisions properly as these marketing departments are too damn good. They’re literally using our brains against us to keep us using technology.
Not just that though, the products themselves are built in such an addictive manner by incorporating persuasive technology that once you pick up the product, it’s hard to put it back down.
At it’s worst, Professor Reich from Stanford University said, “If the baseline for making a projection about the next today is the current level of benefit/harm of digital life, then I am willing to express a confident judgment that the next decade will bring a net harm to people’s well-being.”
Not only Professor Reich though, this link here goes through an insane number of academics and professionals in the field who also are characterising a problem with Silicon Vally.
The problem is that we’re using these products which have longer term negative consequences because we’re being sold them and once we’re sold, we can’t put them back down. Only after 10 years are we now beginning to learn the consequences of long term social media usage.
Let’s take an example from the Social Dilemma. In this, they reference that teenage suicide has rising significantly since the burgeoning of social media:
and likewise other statistics back this up:
But can all this be really driven by social media. Could it not be driven by wealth inequality, racism or even quantitative easing? Other neurological issues are also of course as looking at the rates of cyber bullying, we can see that these are increasing as well:
However, if we look at the extreme of this, despite rising inequality, crime rates have generally been falling since the early 1990’s but back then, kids were playing outside more but now they’re not.
It can only be clear that kids are not actually going outside because it’s not safe, but rather, because they’ve found something better to do.
What about longer term consequences? The social dilemma ventured into the realm of discussing socioeconomic and political issues (like votes being swayed by
Trump via these technological products) but are the users of social media actually happier with it in the long term? Not necessarily.
‘I feel less anxious and less like a failure’
‘I have a much more positive mindset now’
‘I don’t need to prove anything to people’
but of those who remain fully hooked and as stated as the start of the article, we see symptoms that match those seen to drug addicts.
However the sad part of all of this is that unfortunately, there is still so much money to be made in the tech industry and the money which gets invested into it will continue to drive that search for growth. That search for growth will continue to find new ways to hook consumers and unfortunately, we still don’t know where that takes us.
All in all , there’s a lot of evidence of people spending so much time using technological products that they’ve had to sacrifice other parts of their life. With sleep and in-person interaction rates declining and cognitive issues growing in place, the evidence points to social media being a key factor in this and one that doesn’t result in a net good for society.
Now the above discussion has been a simple nose-dive into the current state of user technology and why it’s becoming a problem. The statistics are stark and once we delve really deep into the problems, the consequences are so far reaching that it’s inconceivable about how broad these problems actually are.
Companies are taking steps towards trying to battle the issues but from what the data is telling us, they’re doing an absolutely terrible job.
The problem is that put simply, Social Media and IoT is taking away what it means to be Human.
The immediate takeaway from this line of research is that if something has been designed to be addictive, you probably shouldn’t use it. Especially for the sake of your kids. Force them to live in the real world.
I can’t believe I’m even writing this.