Ryan Pyle Blog: The Economist

Hello.

Why does the Economist hate photographers so much?

I mean, they don't really hate photographers. The Economist is a big picture buyer and their magazine is getting thicker and thicker each year. My reason for my opening statement is that they don't credit any photography; and recently they used one of my images from a computer factory in Shenzhen, and there was no credit in the magazine and only a "Corbis" credit online. See below.

Now, I think I understand why they don't credit writers for their magazine; and it's because they are all staffers and they don't want to draw away from the brand of the Economist and let any individual writers become larger than the actual magazine. And that is fair enough assuming people are compensated enough for giving up that opportunity.

But freelance photographers, and writers as well, rely so much on proper captioning as a form of marketing or advertising. I've had a lot of re-sales over the years from people who viewed an image in a newspaper or magazine and picked out my name in the caption, then googled me and found my website or archive.

So why does the Economist do that? Anyone have any inside information? While it might get on my nerves personally, you can't really fault the Economist and their methods or business plan. Their magazine is booming, in both terms of subscriptions and advertising, while the rest of the industry is falling in to a dark hole. I've been a subscriber for five or six years and I couldn't image living without my weekly edition; if for nothing else it gives me a lot of blog about.

Economist Picture:
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Back to the circuit board
Oct 22nd 2009 | SAN FRANCISCO
From The Economist print edition



Tech firms are doing so well that boosters say they will spur a broader economic recovery. That is unlikely.

THIS year’s Web 2.0 Summit, an annual technology conference in San Francisco, featured a reception at a swanky hotel dubbed “Web After Dark”. The event was packed with euphoric entrepreneurs toasting their grand plans. Conference veterans noted the contrast with the previous year’s summit, which many attendees spent drowning their sorrows as the world economy sank into chaos.

There is plenty of other evidence that the darkness that has hung over the information-technology industry for many months is lifting. Three of the sector’s heavyweights—IBM, Intel and Google—recently reported surprisingly robust profits. Even Yahoo!, a struggling internet portal, did less badly than expected. On October 19th Apple stunned even the most bullish investors by posting its best quarterly results ever: revenues came in at $9.9 billion, 24% higher than the same period a year earlier. Venture-capital investments in America are growing again. And Windows 7, the new operating system Microsoft launched on October 22nd, is expected to pep up demand for personal computers and related gear. The OECD believes a recovery has been under way for some time, particularly in Asia.

All this is more than welcome. But the wave of good news has also helped to buoy the industry’s infamous self-regard. Some even predict that IT will pull the economy out of the mire, with investment in technology giving a swift boost to productivity and job creation. As Edward Yardeni, an economist known for his optimism, has put it: “This will be a technology-led recovery.”

Just how much of a boost IT can provide is a subject of some contention. Both Forrester and Gartner, the industry’s leading research firms, predict that the downturn will bottom out in the current quarter and that growth will resume next year. Yet the two firms differ on the severity of the recession in IT and, more importantly, the speed at which the industry will pull out of its slump. Forrester sees a V-shaped future, whereas Gartner envisages more of an L, with revenues remaining below last year’s level until 2012 at the earliest.

There are good reasons to be conservative. For a start, talk of rapid growth in percentage terms disguises low absolute numbers, thanks to the depth of the recent contraction. If venture-capital investments in America were up by an impressive 17% in the third quarter, according to the National Venture Capital Association, this was mainly because they had dropped to an historic low. The volatile dollar muddles the picture as well. For almost a year, the currency’s increasing strength weighed heavily on the results of American IT firms by devaluing foreign revenues. Now its increasing weakness makes their numbers look far healthier.

In addition, excellent results at Apple, Google and even Intel reflect increased demand from consumers. Apple has benefited from the boom in smart-phones, Google from users clicking on more advertisements and Intel from the popularity of “netbooks” (small laptops), many of which contain its chips. But companies still account for by far the biggest chunk of technology spending. IBM, which offers the entire range of corporate IT services, from powerful computers to consulting services, is therefore a much better proxy for the overall health of the IT industry. Although its profits were better than expected, its revenues fell by nearly 7% in the third quarter compared with the same period last year.



Moreover, it is likelier that the economy, supported by low interest rates and stimulus programmes, is reviving IT, rather than the other way around—a function of IT’s increasing pervasiveness. It now accounts for over half of American firms’ investment in equipment (see chart). In the countries of the OECD, the organisation’s secretariat estimates, it accounts for more than 8% of value-added and nearly 6% of employment. Sacha Wunsch-Vincent, an economist at the OECD, says, “For most OECD countries, the prospects are of a very fragile and weak recovery, for the overall economy and thus for IT.”

Even if corporate investment in IT does bounce back faster than expected, it could be some time before the effects feed through to the broader economy. In a new book, “Wired for Innovation: How Information Technology Is Reshaping The Economy”, Erik Brynjolfsson of the Massachusetts Institute of Technology and Adam Saunders of the Wharton School point out that it usually takes five to seven years for IT investments to produce substantial returns because it typically takes that long for companies to make the organisational changes needed to capitalise on the new technology. What is more, Mr Brynjolfsson points out, the recession has encouraged companies to focus their IT investments on boosting the productivity of shrunken workforces, which may mean that unemployment remains stubbornly high for some time to come.

So the parties in San Francisco seem premature. Yet the recession has also accelerated trends that could make for a bigger celebration later. It has speeded up the adoption of promising new technologies, such as cloud and mobile computing. Without the crisis, consumers might not have rushed to buy cheap netbooks or even smart-phones. Needing to cut investment, companies looked more closely at software delivered as a service over the internet. One firm that has grown consistently this year is Salesforce.com, the largest provider of such offerings.

These trends have also been fuelled by the shift of the industry’s centre of gravity to emerging markets, where consumers have less money to spend on technology and companies are more likely to outsource their IT (see article). Countries such as China and India have seen IT spending increase by up to 30% annually in recent years and account for much of the industry’s recent growth. Between 2003 and 2008, developing countries’ share of spending on IT grew from 15% to 24%, according to the OECD. Developing countries also make more than half of the world’s electronics. China alone churns out more than a quarter, compared with just 3% in 1995, according to Reed Electronics, another market-research firm.

As for rich countries, the crisis has prompted governments to speed up IT investments which might otherwise not have become a priority for years, says the OECD’s Mr Wunsch-Vincent. The stimulus packages of most countries in the OECD include large sums for smart power grids, digitisation of health records and the deployment of broadband networks. All this, he says, should boost productivity and employment in time, provided the politicians have spent wisely—a big if.

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Ryan Pyle
Photographer
ryan@ryanpyle.com
Website: www.ryanpyle.com
Archive: http://archive.ryanpyle.com
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