The Internet has had a world-changing impact on businesses over the last twenty years. Cloud technology has emerged. Access speeds have increased as the costs of data processing and storage have fallen.
Online connectivity is huge. We claim 2016 as the year of singularity when the number of digitally connected devices, equalled the number of people on the planet. From a level of around 7.4 billion this year, we forecast the number of digitally connected devices will increase to around 11 billion by 2020, peaking around 15 billion by 2030. It is estimated the internet of things could lead to over 50 billion devices connected to the internet by 2020.
Over the next ten years, change could happen even faster. The rate of change is increasing. Not exponentially, that’s just a function of how you squeeze the x axis. It is increasing at a faster and faster rate.
Industries of the future …
So which will be the industries of the future? That’s a tough assessment. Using the Donald Rumsfeld formula, there are known knowns, the things we know we know; There are known unknowns, the things we know, we don’t know; But there are also the unknown unknowns, things we don’t yet know, we don’t know.
This is the great suspicion about forecasting and determining the industries of the future with so little hard information other than history to guide us. Things will happen of which, as yet, we know nothing. In 1943 Thomas J Watson Chairman of IBM claimed “There is a world market for about five computers”. In 1950 Popular Mechanics reckoned “Computers in the future may weigh no more than 1.5 tonnes”. Now in the digital age, the ambition for advanced economies at least should be a computer (or digital device) in every home and high speed broadband access for all.
So which will be the industries of the future?
Where better to start than with Alec Ross and "The Industries of the Future". As Hillary Clinton's Senior Advisor for Innovation, Alec Ross travelled nearly a million miles to over forty countries.
“From refugee camps in the Congo and Syrian war zones, to visiting the world's most powerful people in business and government, Ross's travels amounted to a four-year masterclass in the changing nature of innovation”.
In "The Industries of the Future", Ross distils his observations on the forces that are changing the world. He highlights the best opportunities for progress and explains how countries thrive or dive. Ross examines the specific fields that will most shape our economic future over the next ten years, including robotics, artificial intelligence, the commercialisation of genomics, cybercrime and the impact of digital technology on so many areas including “precision agriculture”
Ross gives readers a vivid and informed perspective on how sweeping global trends are affecting the ways we live, now and in the future.
In this week’s feature, we are going to focus on robotics, artificial intelligence, data mining and predictive analytics. Sectors in which the future is already encroaching on the present. Global spending on robots was an estimated $15 billion in 2010. By 2025 it is estimated to rise to $67 billion.
We have heard many scare stories of the invasion of robotics into the work place. Hundreds of thousands of jobs lost to the next generation of mechanoids. Droids equipped with a better AI software load soon with an emotional quotient. A robot that can laugh at, and cry with, the workers to be displaced.
From the professions to care homes, the installation of robots will disturb the current perception of the work place. We accept the installation of robotics on the production line. Confronting “Cognitive Agents” at Enfield Council and other local authorities may yet be a step too far too soon for many rate payers.
Andy Haldane Chief Economist at the Bank of England delivered a speech in November last year suggesting 15m UK jobs could be taken by robots as automation spreads through the workforce, thats half the workforce! No need to worry about immigration in the years ahead. Robots will pick the farm fields of Boston, look after the elderly and deal with aspects of healthcare. Yes the “robot will see you now” will be the call through the surgery. Droids dishing out pills for depression as the displaced seek medication, the likely out turn.
Occupations most at risk include administrative, clerical and production tasks. For an accountant, the probability of vocational extinction is 95%. For a hairdresser, it is 33%. For economists the potential extinction quotient is much lower at 15%.
Should we be worried?
Concerns about job substitution are hardly new. As Haldane explained, the technology debate was re-stirred in the 1930s, at the time of mass unemployment during the Great Depression. In “Economic Possibilities for our Grandchildren”, Keynes predicted on-going technological advance and workers being replaced by machines (Keynes (1930)).
Yet far from being a threat, Keynes viewed this as a huge opportunity. He predicted that, by 2030, the average working week would have shrunk to 15 hours. Technology would give birth to a new “leisure class”. Overnight droid deliveries from a commercial fleet of vehicles on smart motorways may well be the norm. By 2030, just the economists and hairdressers would be fulfilling a working week.
AI and Robotics offer great opportunity to fulfil the shortage of doctors, nurses and teachers in the developed world. Great advances in equality, welfare and deprivation can achieved be better access to education and first line medical care in developing countries.
Data the raw material ...
Lots of excitement too about deep data mining and predictive analytics. As we explained earlier in this series on Digital Disruption, the volume of data to be analysed will explode. Data created by the internet of everything will exceed 500 ZettaBytes by 2020 up from 150 ZettaBytes in 2015. That’s over half a Yottabyte each year with more to come. By 2050 there will be a lot of Yottabytes to be stored and analysed every year.
The Google Acquisitions of Boston Dynamics and Deep Mind are witness to the significance of this trend to the internet majors. IBM’s Watson is already placing highly complicated algorithms and neural networks into the hands of many. Deep Mind is currently working with the NHS with a trial of triage assessment in A & E. Data management, simultaneous translation, predictive behaviours will be delivered into the hands of businesses of every shape and size.
But what to do with the data ?
Predictive technologies developed by Google and Amazon are setting the standards for consumer service, user journeys and experience by which by which all businesses, both B2B and B2C, will be judged.
Tesco’s acquisition of Dunnhumby in 2004 helped propel the supermarket to national dominance using the data provided by the Tesco loyalty card. Palantir is building data fusion platforms for integrating, managing, and securing any kind of data, at massive scale. “On top of these platforms, we layer applications for fully interactive, human-driven, machine-assisted analysis” as Alex Camp CEO explains.
Great successes have been claimed by Palantir. Using big data to find missing kids.“How Palantir uses Big Data to Find Missing Kids Fortune March 14 2016. Of lesser great social acclaim is that working with Hershey the U.S chocolate giant, crawling through the data base, the Palantir data crawlers discovered Hershey bars sell better when merchandised next to Marshmallows in store. Ah yes, there is hope for humanity.
So as with robotics, AI and data mining, businesses must adapt to the challenge of digital disruption by first challenging their own organisations and business models. Join us in our journey as we examine the challenge of digital disruption in our masters of strategy series.
That's all for this week, More to follow, Happy Strategies,