We humans like to measure things. Companies like Survey Monkey (which collects 16 million answers daily) will take nearly any business contact you’ve had and convert it into a number. Over the past week, they’ve hit me up for ratings on a hair salon, a cable provider and an auto parts store. On a scale of 1 to 10, where 1 = Strongly Disagree and 10 = Strongly Agree, how do you feel about that?
Some numbers mean more than others. Back in the spring of 1896, Charles Dow was working as an editor at the Wall Street Journal and searching for a straightforward measure of stock market performance. He and his buddy Edward Jones decided to pick a dozen stocks that they thought would best represent the market and publish an average share price. The original twelve represented industries like tobacco, distilling, agriculture, utilities and coal. The idea had legs; today there are 30 companies in the Dow, and it remains a closely watched measure of how our economy is doing.
A dozen decades later the original dozen is gone from the list. General Electric Corporation recently became the last to be dropped. While there are no specific rules for inclusion in the Dow, it is generally assumed that the members should be large and well respected public companies. This measure of our economy is meant to reflect what we feel is important and therefore spend our money on.
It’s a safe bet that Charlie Dow had a staff member whose job it was to gather stock prices on those twelve companies from a ticker tape, add up the numbers with pencil and paper, and use long division to compute the average. The list wasn’t expanded to 30 companies until 1929, a year which left a mark in history for a different reason. (if you’re not sure what that means, just Google “1929”). By that time, another financial services company known as Standard and Poor’s was refining its own measure. S&P used a more nuanced formula on securities chosen for their market capitalization, and it grew to become the S&P 500 by 1957. At that time, ticker tapes and long division had mercifully been replaced by superior technology.
The numbers we crunch, and how we crunch them, will continue to evolve, driven by the available technology and chosen for the values they reflect. The result may measure the health of the financial markets, but it is built on the businesses that represent our culture. In this survey, we vote with our dollars.
Tobacco and booze are now gone from the top 12 on the list, replaced by finance (Berkshire Hathaway, Chase, B of A), Big Oil (Exxon Mobil, Chevron) and Big Pharma (Johnson and Johnson). The rest are technology companies - Apple, Microsoft, Amazon, Facebook, Google. Not only did these tech companies measure up, but they did so in a big way.
Apple computer recently had a market cap of $935 Billion. It is expected to be the first company to reach the $1 Trillion mark. In comparison, the US National Debt currently stands at $21 Trillion. To achieve this, Apple sold more than a Billion iPhones to a world with a total population of just over 7 Billion. The power to instantly communicate with nearly anyone on the face of the planet is in our hands, and we’re not letting go anytime soon.
Estimates suggest that there are more than a Billion worldwide users of Microsoft Windows-based PC’s, accounting for 92% of all Internet traffic. Though they have lost some share over the past few years, Windows 10 remains 4 times more popular than Apple’s Mac OS. When he was President of IBM (now part of the Dow 30), Thomas Watson said “I think there is a world market for maybe five computers.” By any measure, he was wrong.
It is tempting to dismiss Amazon as a mere retailer, but to do so you would have to look past technology like Alexa, Kindle, Fire and Amazonrobotics. Sixty-four percent of American households are subscribed to Amazon Prime, and by recent estimates the company processes around 35 orders per second. Shopping for something by going to actual brick and mortar stores is nearly a thing of the past. Founder Jeff Bezos is currently the richest man on the planet ($141 Billion). Not satisfied with mere drone delivery-bots, he spends much of this on launching payloads into space (Google “Blue Origin”) because he can.
Facebook has been in the news a lot lately, and much of that is a direct result of our sudden awareness of its influence. FB currently has over 2 Billion active users a day, sharing everything from vacation photos to Russian propaganda. Founder/CEO Mark Zuckerberg is under a lot of world-wide pressure, and all he can show for it is a net worth just over half of Jeff Bezos’, and no rockets.
Finally, there is Google, notoriously reluctant to be publicly measured but estimated to have a key metric at around 5.5 Billion searches per day. That works out to one search per day for 80% of the world’s population. Granted that many people don’t have Internet access (yet), and a lot of us search more than once a day, that’s still a big number. If you are skeptical of those stats, just Google “Google search statistics” and watch the numbers fly. In today’s world, not knowing is unacceptable, and Google knows that.
It’s easy to see that technology is not just one more factor in our lives; it defines us. What’s tougher to grasp is how this is changing who we are, and what we might be missing out on as we obsess over tech-bling. Once upon a time, tobacco, alcohol, food and utilities were what mattered. Technology is what’s important to us now; it greedily captures our time and our money. No matter how you measure it, Tech “R” Us.
Author Profile - Paul W. Smith, a Founder and Director of Engineering with INVENtPM LLC, has more than 35 years of experience in research and advanced product development.
Prior to founding INVENtPM, Dr. Smith spent 10 years with Seagate Technology in Longmont, Colorado. At Seagate, he was primarily responsible for evaluating new data storage technologies under development throughout the company, and utilizing six-sigma processes to stage them for implementation in early engineering models. He is a former Adjunct Professor of Mechanical Engineering at the Colorado School of Mines, and currently manages the website “Technology for the Journey”.
Paul holds a doctorate in Applied Mechanics from the California Institute of Technology, as well as Bachelor’s and Master’s Degrees in Mechanical Engineering from the University of California, Santa Barbara.