By Rohit Talwar

What are the forces, ideas, tensions, developments, opportunities, and choices shaping the future of business over the next twenty years?

Charting the Future of Business

The future of business over the next two decades will not be a linear extrapolation from the present day. There are many possible scenarios – each with multiple paths to get from where we are today to an uncertain tomorrow. Those scenarios arise from the complex interplay between a range of future factors:

• Socio-demographic changes, and the rapidly evolving values, needs, and expectations of individuals and societies.
• Political and economic shifts.
• Alternative possible trajectories for energy, resources, the environment, biodiversity, and sustainability.
• New business thinking and the impacts of an increasingly globalized business landscape.
• Rapid and convergent developments across a range of disciplines in science and technology with potentially disruptive impact.

This post examines the critical tensions and choices that are arise from the interplay of these forces and outlines the domains of science and technology that could catalyze the biggest changes in our world.

I highlight emerging business sectors that could shape tomorrow’s economy and examine the new business strategies and behaviors that these developments could enable. I conclude with an assessment of the critical decisions businesses need to make as they define their future purpose and strategy.

The central role of information and communications technology

The business landscape is being shaped by a number of major shifts that in turn are forcing us to rethink every aspect of our purpose, philosophy, culture, strategy, business model, capabilities, technology architecture, operational design, organizational architecture, HR approach, and financing options. At the heart of the story about tomorrow’s business, is the impact of the ever quickening pace of advances in information and communications technology (ICT) in particular. We are experiencing exponential rates of development and declining costs for many of the underlying fields from computer power and storage capacity to communications speeds and data transmission bandwidths. These are enabling the spread of relatively low cost mobile devices across the globe, giving ever-larger numbers access to the internet, and driving the current dialogue around digital transformation and industry disruption.

When worlds collide

The pace of digital penetration into every aspect of our world is leading to an inevitable clash between two worlds. On the one hand we have the planet populated and largely still run by those born physical. They see the world as a very tangible entity with physical outputs – whether they build houses, produce cars, or provide financial services. In this world, despite digital advances, “analog” mindsets dominate aspirations and decision making, hence growth opportunities and business problems are tackled in a relatively linear manner – with technology as an enabler.

This physical world is on a headlong collision course with the inhabitants of “planet digital”. The latter is inhabited by individuals and firms who are born digital. Instead of houses, cars, and savings products, all they see is data. They believe every challenge and problem can be addressed by finding the right software algorithm and deploying the appropriate mix of technologies. Crucially, they bring exponential thinking to business strategy. They want to break with linear approaches that typically limit them to 5 to 50 percent improvements on key measures of organizational performance. Instead, they are looking for ways to triple the number of houses built per week, reduce the time to produce a new model by 20 times or more, and quadruple the number of customers per employee.

Reworking the DNA of business

The challenge for those not raised with a digital mindset is to learn how to evolve and compete in the new environment. Can we get there by simply deploying more technology or do we need radical reframing of our way of seeing the landscape – do we need to develop a digital and exponential mindset? Some believe this evolution of their DNA can be achieved within the existing “rules of the game” – innovating within the standard industry practices, established ways of thinking and unspoken assumptions that shape the strategies of most players in the sector. Others are trying to reinvent themselves by pursuing game changing approaches. In many sectors, the biggest disruption comes from new entrants who ignore the old rules and seek to change the game itself.

For example, when Skype entered the telephony market it changed the game by taking the industry’s core product – the humble phone call – and making it available for free. Skype has captured around 40 percent of international telephone traffic with a fraction of the total workforce of most telecommunications operators. Those adopting this path have to embrace a fundamentally different mindset and culture – rather than simply making the investment in more technology.

As you read through the chapters in our first book, The Future of Business, it becomes clear that businesses trying to carve a path to the future will have to respond to a number of significant tensions that are emerging across nations, society, and business. These opposing forces are driving the need for new thinking and new strategies, creating new opportunities and unveiling a whole new range and scale of risks.

Economic, political, and social tensions

As countries wrestle with the complex questions posed by a fast changing and highly interconnected world, the decisions they make have a fundamental bearing on the choices made by both national and international businesses.

• Econo-Political Consolidation versus Fragmentation. Some groupings such as the European Union, ASEAN and the Gulf States could see greater convergence on a range of economic and political policy issues. At the same time, a range of smaller and struggling developing nations may seek to merge. In both cases the drivers are the need for economies of scale and consolidated policy making in the face of an accelerating pace of change. These forces drive the need for nations to create critical economic strength, attract the investment required to serve their populations, and compete in the hyper-connected era. In parallel, we may see many regions seek to break away from countries in pursuit of economic and political independence.
• Closed versus Open Flows. Those who seek to control economic activity will be challenged by a relentless pursuit of the opportunities presented by globalization. Network technology in dismantling artificial barriers to the free global flow of information, knowledge, people, money, assets, services, and physical goods. A more dynamic, instantly responsive and rapidly evolving system will introduce new sources of opportunity, uncertainty, and volatility.
• Ageing versus Youthful Societies. In many nations, an ageing population with a declining birth rate will pressurize government finances and care systems. Developing nations with faster growing and younger populations will face the triple challenges of upgrading education models, creating employment and providing effective health and social systems.
• Masculine versus Feminine. Male-dominated power structures and systems in governance, business, society, and the family will continue to come under pressure. Females now outperform males at every level of the education system across the planet. Women’s income levels are rising, as is the proportion of total national assets that they own. Together these developments will accelerate the drive for equal access to workplace opportunity, advancement, and rewards and be a transforming force in many economies. These in turn will challenge organizational thought processes, governing assumptions, dominant cultural metaphors, and workplace practices.
• Power versus Profit. Global energy demand is expected to outstrip supply for many decades to come. Warnings around the dangerous climatic and environmental impact of fossil fuels are ever-more frequent. Trillions of dollars of investment is required to ensure adequate and continuous power for a growing global population and the underlying infrastructure and business sectors that serve it. Massive growth is inevitable and necessary in the use of alternative energy sources from solar to wind, tidal, bio-waste and geothermal. The sheer level of financing required to develop and scale up this new global energy grid will require participation from governments, and the willingness of investors to accept lower returns than those traditionally achieved in the energy sector.

Commercial pressure points

Business will be reinvented as sector incumbents are challenged externally by brash new entrants and internally by a generation demanding change. These upstarts are embracing new ideas – fueled by technology advances, different generational attitudes, and shifting global perspectives on what emerging nations are capable of. This will be test each of the pillars upon which we have built modern business, global trade, and its governance systems.

• Corporate Power versus Youthful Ambition. Up to 50 percent of the Fortune 500 in 2025 probably doesn’t exist in 2015. Many more traditional “linear thinking” companies may struggle to reinvent themselves with an “exponential mindset” for the digital age. They will be challenged by so called “hyper-growth companies” seeking “triple digit plus” rates of improvement and growth. These challengers could emerge in sectors like alternative energy, food production, genetics, driverless cars, 3D and 4D printing, and goods and services that we can’t even conceive of today.
• Old Money versus New Finance. We’ll still have financial services but not as we know them. The notion of public stock markets could be transformed by transparent blockchainpowered (see below) trading platforms and more efficient online crowd funding solutions. The widespread use of distributed digital currencies like Bitcoin, could effectively create a single global monetary system and eliminate currency markets and centralized regulation. By 2025 we should expect the industry to have been reshaped by open markets and crowd based solutions that bypass existing providers of everything from savings and insurance to equity investment and commercial financing.
• Consolidation versus Distribution. There is an increasing prospect of “winner takes almost all” in many technology-enabled markets and online services. As a result, unemployment could rise and the disparities between the rich and poor could grow – driving the rise of a global hyper-rich segment. Automation is decoupling economic growth from job creation and driving technological unemployment. Joblessness levels of 50 percent or more could become the norm without radical shifts in national economic strategies. This will drive down average income levels and increase demands for some form of guaranteed basic income for the whole population.
• Safe Havens versus Wild Frontiers. Business attention, investment, and talent will be attracted to rapidly growing emerging market mega-cities such as Mumbai, Delhi, Dhaka, Sao Paolo, Kinshasa, and Lagos. These cities are typically characterized by burgeoning populations and an increasing middle class. However, they often have fragile physical infrastructures and under-developed civil society frameworks. The opportunity will test the capacity of more rigid thinking Western corporations. To survive and thrive in these new arenas, they must learn how adapt and behave like water in the face of myriad obstacles. Will this shift in focus happen at the expense of slower-growing but better-understood mature economies that are struggling to adapt to a new world?
• Manual versus Automated. Advances in AI and robotics in particular could drive the replacement of humans by machines in every walk of life from retail assistants to airline pilots, accountants, and doctors. Businesses will increasingly have to make philosophical choices between continuing to employ people for the benefit of society and automating for profit maximization. Science and technology choices Rapid progress in existing domains coupled with the emergence of new fields of discovery will continue to excite and challenge governments, business, and society. Issues will arise over the extent to which we should seek to control and regulate research endeavors – and whether it is even feasible or realistic in the modern age. As, the boundaries between humans and machines continue to blur, and technology is increasingly embedded in our bodies, business will be forced to reassess how far it is prepared to go in pursuit of profit.
• Human versus Machine Intelligence. Battle lines could be drawn between those wanting to preserve the sovereignty of flesh over silicon, and the innovators keen to experiment with the possibilities created by Artificial Intelligence (AI), collective intelligence, and deep learning systems.
• Enhanced versus Unenhanced Humans. Our notions of what it means to be human will be challenged by advances that enable the chemical, genetic, electronic, and physical augmentation of our brain and bodies. The use of smart drugs, genetic modification, direct brain stimulation, and exoskeletons could see the emergence of a new modified breed of Human 2.0 with far greater capabilities than their unenhanced counterparts.
• Info versus Bio. While most expert commentators expect information technology to be the centre of the economy for the next two decades, others believe the emergence of the biological era could have even greater impact. From gene therapies and gene editing to new materials and energy sources from synthetic biology – there is huge potential. The promise of DNA-based computing and could transform the information and communications technology (ICT) sector and see the human body become a computing platform.
• Physical versus Virtual. With everything from money and education to policing and governance moving to the digital realm, greater focus will be placed on virtual assets. The physical will become increasingly ICT enabled – with sensors, computing, and communications capability being embedded in everything from clothing to wallpaper. For example, the proportion of ICT functionality in the value of a new vehicle could rise from 30 to 50 percent today to 80 percent by 2035. The boundaries between physical and virtual will continue to blur through augmented and virtual reality.

New leadership capabilities

To navigate a coherent path through the choices being thrown up by these tensions, businesses will need to learn new decision making approaches. Central to the new leadership agenda will be the ability to master complexity, systems thinking, scenario planning, predictive modeling, collaboration, experimentation, and discovery-led innovation approaches. A clear challenge here is to develop the intellectual depth and resourcefulness required to address such a complex and fast-changing agenda. In response, an increasing number of leaders are turning to spiritual practices such as mindfulness meditation to help them tap into the capabilities of their subconscious mind and tune into their intuition. A range of research studies have demonstrated the positive impact of such regular practices on health, wellbeing, mental outlook, and performance.

The revolution will be intelligent, automated, synthesized, and broadcast

A range of transformative science and technology developments promise to revolutionize old industries and give birth to new sectors. Summarized below are fifteen areas of development with significant disruptive potential over the next two decades.

Information and Communications Technology

• Exponential Technologies. The power, capacity and functionality of a range of technologies will continue to increase. For example, some experts believe that by 2025 we could see computers capable of operating at the speed of the human brain – roughly 10,000 trillion cycles per second.
• New Computing Architectures. A range of initiatives are underway to replace silicon as the base material of our computing devices. Developments in areas such as Optical, Quantum and DNA-based devices could deliver massive leaps in performance using radically different concepts and models of computing.
• The Hyperconnected Internet of Humanity. The internet could reach five to seven billion people by 2035. The content of the web will be available to all – mainly via their mobile devices. Anywhere from 50 to 250 billion devices could be connected to the web, along with a trillion or more sensors embedded in those devices and other objects such as furniture and product packaging. Cisco estimated this hyperconnected Internet of Humanity could generate $19 trillion8 of value through better use of assets, increased employee productivity, elimination of supply chain process inefficiencies, improved customer experiences, and technology innovation.
• Blockchain Technology. The blockchain is a highly secure protocol that enables the direct digital transfers of information without an intermediary. It can be used for money (Bitcoin), personal data, stocks, transaction records, and contracts. The distributed and secure model that underpins blockchain based systems could transform financial services, eliminating the clearing house role. It is already facilitating the creation of smart self-activating contracts and driving the idea of Decentralized Autonomous Organizations (DAOs). These largely automated entities would combine blockchain approaches and AI to conduct the business of the organization according to a precise set of business rules. Some say blockchain and what it enables are the basis for a transformation of the economy and could have an impact bigger than the internet.
• Immersivity and Mixed Reality Living. Our physical environment will have ever-greater capability to identify and interact with us – tailoring the experience to each individual based on the information we are willing to share. Multi-sensory stimulation will take augmented and virtual reality to the next level. Online retail could be transformed when we can add touch, taste and smell sensations.
• Artificial Intelligence / Conscious Technology. We are entering a phase where advances in AI could yield systems that come close to matching human capability. The next evolutions could see the development of so called strong AI, Artificial General Intelligence (AGI) and SuperIntelligence. These tools could exceed human reasoning capabilities and outstrip us in every intellectual endeavor – potentially behaving in ways beyond our current comprehension. There is widespread disagreement within the AI-community over whether and when such advances could occur. If they do happen, these developments could be just 10-20 years away. Over the next decade we will definitely see the emergence of more highly intelligent and adaptive personal ecosystems. Our intelligent agents will learn from our behaviors, act on our behalf in the digital realm, anticipate our needs, provide us with timely information, and guide our choices.

Advancement of Humanity

• Healthcare Transformation. Wearable and embedded sensors and devices could transform everything from condition monitoring to drug delivery and treatment. Big data and AI will enhance diagnosis and care planning. Telemedicine and robotic surgery could enable improved life expectancy in remote areas. Low cost 3D printing, stem cell treatments, and new tissue growing capabilities will make reliable organ replacement safer, faster, and cheaper.
• Human Augmentation. Humans will increasingly “upgrade” their brains using a combination of nootropic cognitive enhancing smart drugs, and electronic brain stimulation. Our physical performance could be augmented through gene editing and gene replacement, physical modifications, 3D printed electro-mechanical replacements, and exoskeleton body strengthening attachments. We could see genetic treatments to eliminate conditions such as rage and obesity. In their chapters, B J Murphy and David Saintloth suggest we could see the emergence of high street Body Shops and treatment centers offering a range of such augmentations.
• Brain Uploading. A number of major research initiatives are working on mapping how the human brain stores information, which could be achieved by 2025. Technology companies will compete to “back up” our brains online.
• Transformation of the Food Chain. Global food demand is increasing at more than double the growth rate of food supply. Radical solutions are required to feed a planet with rising incomes and consumption aspirations. A range of innovations are being explored to meet those demands over the next two decades. These include genetically engineered crops, saltwater agriculture, open-sourced food research, vertical farming, precision agriculture, 3D printed food, and organic crop management. On the next horizon are robot farmers, bioprinting of meat and other foodstuffs – combining tissue engineering and 3D printing, localized food production, plant-based meat alternatives, personalized nutrition, AI-designed foods and recipes, and low-cost foodstuffs developed for nutrition rather than taste.

Domestic Infrastructure and Manufacturing Systems

• Robotics / Drones. From driverless cars to construction and elder care – robots and their drone cousins are entering our world in large volumes and the price is falling dramatically. The speed, dexterity, balance, reasoning capability, and emotional intelligence of robots could increase to the point where robotic companions could be commonplace by 2030.
• 3D / 4D Printing. The speed, functionality, choice of materials, and range of applications for 3D printing will continue to increase. Everything from blood vessels, to food and buildings are already being 3D printed. Neighborhood maker centers could become increasingly prominent – allowing individuals to download product design “recipes” from the internet or create their own designs and then fabricate them using these shared community facilities. The evolution to 4D printing will enable the manufacture of objects that can self-assemble and change their shape and properties – for example producing limbs that could reinforce themselves as we age.
• Nanotechnology and Atomically Precise Manufacturing (APM). Nanotechnology is the manipulation of matter at the atomic, molecular, or nanoscale – working with particles roughly 1 to 100 nanometers in size. Advances in physics, chemistry and biology have enabled us to engineer materials and nano-systems. Already in use in many sectors such as chip manufacturing, the next big stage of development could impact many industries. The goal is to build products with atomic precision – literally assembling them atom by atom to give the precise properties we desire and eliminate waste in the manufacturing process. This could deliver low-cost, high-performance components and systems. APM would enable the production of stronger, lighter, safer, lower emission, and more efficient physical structures, engines, medical devices, drugs, energy sources, and foodstuffs.
• Synthetic Biology. There are a range of developments that could result from applying engineering disciplines to biology. This could enable development of low-cost drugs, new materials, foodstuffs, chemicals, and energy sources. It could provide tools to clean up toxic spills and remediate environmental pollution. The potential to engineer entirely new lifeforms is also being explored. The so-called NBIC convergence between nanotechnology, biology, information technology and the cognitive sciences could in future yield smart, adaptive and self-healing materials and entire biological systems.
• Energy Innovation. Energy demand is rising driven in part by a mobile device-enabled web-connected population – driving concerns over the environmental impact of fossil fuels. The argument is building for increased investment in alternative sources of energy supply. The debate over nuclear safety will rumble on but a significant expansion of global nuclear generating capability seems inevitable. A range of cleaner alternatives such as solar, tidal, geothermal, wind, and bio-waste will take a larger share of total energy supply. However, governmental inertia, corporate hesitancy, lack of investment, and continued debate over the right energy mix could hold back alternative energy development. Later in this book, Devin Daniels and James Lee highlight the potential of space-based solar power and tapping into fields of methane hydrates (crystallized natural gas) trapped below the arctic permafrost in our oceans.

Viewed collectively, these developments could drive significant shifts in every aspect of our world in 2035. The impacts range from what it will mean to be human and how health and wellness services are delivered through to future energy supply, the cars we drive, the homes we live in, and the ways in which goods are produced.

Industries of the future

The transformative tensions and developments outlined above will in turn spawn a range of new industries – many of which are discussed elsewhere in this book. The likes of Mckinsey, Volans, and others have done extensive research on emerging sectors that could drive the next wave of $100 billion to $1 trillion plus global industries. The three lists below identify thirty existing and emerging sectors that we believe could account for 50 to 60 percent or more of the entire global economy over the next two decades. These will become an increasingly focus for innovators, entrepreneurs, investors and those who might provide products and services to these sectors.

• Critical Sectors – Technology, Citizen and Domestic
• Information and Communications Technology
• Citizen and Domestic Mobile Internet – Devices, Infrastructure, Commerce and Services
• Healthcare Innovation
• Next Generation Intelligent, Personalized Internet
• Elder Care
• Cloud Based Applications, Infrastructure and Services
• Human Augmentation / Body Shops
• Internet of Things / Internet of Everything / Internet of Humanity
• Clean Domestic Water and Sanitation
• Big Data, Data Mining and the Automation of Knowledge
• Smart Homes – Intelligent Devices, Air Conditioning, Waste to Power
• Artificial Intelligence and Deep Learning
• Green Vehicles / Electric Cars / Autonomous and Near-Autonomous Vehicles
• Blockchain-Based Systems and Distributed Autonomous Organizations
• Education Systems Transformation
• Critical Sectors – Production and Societal Infrastructure and Services
• Production Technologies and Systems
• Societal Infrastructure and Services
• Advanced Robotics / Drones New Food and Agriculture Solutions
• 3D and 4D Printing and Advanced Materials
• Sharing / Circular Economy Solutions – Repurpose Recycle, Reuse, Repair
• Genomics and Synthetic Biology Smart City Infrastructures and Services
• Biomimicry Applied to Design of Products and Engineered Systems
• Intelligent Transport Systems
• Rapid / Green / Sustainable Construction
• E-Government
• Critical Sectors – Industry Transformation, Energy and Environment
• Industry Transformation Energy and Environment
• Global Infrastructure – Roads, Transport, Energy, Water
• Alternative and Renewable Energy / Energy Storage
• Automation of Professional Services – E.g. Accounting, Legal,
• Consultancy, and Architecture Advanced Oil and Gas
• Exploration and Recovery – Including Fracking, Methane Hydrates
• Financial Services Technologies Geo-Engineering, Climate / Environmental Protection, Disaster Recovery, and Remediation

New business strategies and behaviors

So how might businesses respond in the face of these forces of disruptive change and the potential opportunities and risk they could create? Here are ten types of response that might emerge and which – in some instances – we can already see evidence of. Some of these behaviors will become strategies in their own right; other firms might form their strategies by combining a range of these behaviors.

• Exponential Thinkers. A growing number of firms are already looking to apply exponential thinking to the design of their organizations – driving 100 per cent or more improvement.
• Intimacy Freaks. A growing number of businesses will begin to understand the power of the information they hold about their customers. Using big data, predictive analytics, and AI they will be able to forecast customer intentions and behavior with unerring accuracy. This will drive the desire to increase the frequency of contact, and extend the relationship with customers. The providers of the most popular devices and services such as Apple, Samsung, Google and Facebook already own the customer interface to large numbers of customers. They will fight to deepen these relationships, increase the dependency upon them, and erect barriers to prevent others from stealing away customers.
• Barbarians. As data becomes central to the understanding of any market, challengers will be ever-more willing to enter a sector, ignore the existing rules of combat and adopt approaches that effectively change the game and savage and paralyze the incumbents. This is happening already in the home delivery market where digital brands with deep customer intimacy are able to offer a range of products and services from other retailers. By positioning their own brand as the purchasing portal, they are effectively diminishing the power of the underlying brands. To whom do born digital customers have greater loyalty – Amazon, Google and Facebook or Target, Wal-Mart and Home Depot from who the intermediary might be buying the items?
• Aliens. In the face of digital transformation and market disruption, established industry players may choose to adopt strategies that break ranks, ignore established rules of engagement and change the game. Such strategies will be pursued with the aim of pre-empting external challengers and seeking a first mover advantage over existing competitors. China’s Broad Group has pursued such a strategy using rapid construction approaches to overturn traditional industry timelines by pre-fabricating the sections in the factory prior to onsite assembly. For example, they have erected a 30-storey hotel in just fifteen days.
• Magicians. Rapid automation is driving the potential commoditization of many products and services. In response, businesses will be challenged to differentiate themselves by creating moments of magic in the customer experience that deliver a genuine wow factor. What aspects of your offering and customer experience exceed expectations and have customers telling stories about you?
• Adoption Agencies / Buy a Future. Some organizations may begin to recognize that they are ill-equipped to succeed in the emerging landscape. Their survival strategy may be to effectively “adopt” the players who they think can create that future for them – investing in firms who can drive the necessary internal and market-facing metamorphosis. These might be smaller and more nimble rivals in the sector, bold new competitors, or consulting firms who truly understand what it takes to win in uncertain times. Others may deliberately target their corporate venturing arms to buy into firms that could change the game and destroy the core business. Indeed this is already becoming more commonplace in the venturing sector.
• Business Light. The challenges of refocusing and aligning large organizations can be slow and painful. In response, some may feel the best way forward is to strip the organization back to its bare bones. Such business light entities might comprise a small core staff that frames strategy, creates key ecosystem partnerships, and manages finances and stakeholder relationships. Literally everything else from product design and manufacturing through to marketing, sales and distribution would be delivered by a network of outsourced partners and service providers.
• Trekkies. Bold ambition is becoming fashionable. Competitions like the X-Prize, moonshot initiatives such as Google’s “We Solve for ‘X’”, and institutions like Singularity University are all focused on deploying radical science and technology ideas to address global problems and challenges. Investors, entrepreneurs and innovators are increasingly focused on the pursuit of the seemingly impossible with venture ranging from low cost sustainable housing and universal education, through to hypersonic travel, colonizing space, and asteroid mining. This desire “to boldly go” where others dare not tread will drive a constant stream of ever-more ambitious initiatives. These will go well beyond normal corporate agendas and blur the boundaries between the roles of the public and private sector.
• Automation Junkies. The promise of the entirely automated enterprise will be a magnet for many entrepreneurs attracted by the notion of establishing a Distributed Autonomous Organization (DAO) that can eliminate the uncertain human element and exist almost entirely in software and silicon. This in turn could give rise to the notion of companies as technologies and corporate conglomerates and investment funds as platforms for the aggregation of multiple DAOs.
• The Non-Owned Enterprise. In the same way as no one can lay claim to ownership of the outputs of the open source initiatives in software development, plant research or car design, we may see similar non-owned open source models of organizations emerge. These could be DAOs where some form of rewards are given to those who write the rules and house the distributed infrastructure for the business, but where no one actually owns it. We could see a growing movement towards firms which seek to compensate those who provide services or infrastructure but have no shareholders. They may recycle any profits to fund operations and future developments. They might also make voluntary contributions to national guaranteed income funds to help those who have little or no chance of employment.

Conclusion – choosing a future

A range of high-impact forces are reshaping the business landscape. The central role of ICT is accelerating the collision between the physical and digital worlds and driving choices around how we rework our organizational DNA. Changes in the economic, political, social, commercial, scientific, and technological domains are transforming every aspect of society. The change process is surfacing fundamental tensions and shaping key choices facing business over the next two decades. A range of critical science and technology developments is creating the potential for disruption of old sectors and the emergence of new ones – these could form the heart of the global economy over the 2025-2035 timeframe.

In response to these forces, a range of new behaviors and strategies are starting to emerge for the conduct of business in the decades ahead. Our response to the underlying tensions, technology developments, behavioral options and strategy choices will shape the course of organizations. I believe five key sets of decisions will drive those responses:

• Being – What kind of organization do we want to be in the future? (Purpose, ambition, societal impact, stakeholders, values, ethics, behavior, governance, products, services, and markets)
• Behavior – What strategies, operating structures, and organization designs do we need to achieve our purpose?
• Financial Orientation – What business models will we use to fulfill our ambitions? (Profit orientation, ownership, asset and infrastructure financing, innovation funding, revenue models)
• Talent – What human resources models could best deliver our people ambitions? (Balance between humans and machines, levels of employment, critical roles, leadership, development, enhancement opportunities, rewards, community engagement)
• Delivery – What mindset, capabilities, and technologies do we need to ensure we can survive and thrive in a rapidly changing world?

This article is excerpted from The Future of Business. You can order the book here.

Images: https://pixabay.com/images/id-3979196/ by geralt

By Steve Wells, Rohit Talwar, and Alexandra Whittington

How might artificial intelligence impact the jobs landscape in the financial sector?

Of all the business technologies that have come to market recently, artificial intelligence (AI) has been the one generating the most buzz, expectation, and hype. It is also spawning an ever-growing set of doom-laden predictions of how it could be society’s last big invention and bring about the end of jobs as we know them in industries such as financial services. The simple truth is that we are at a very early stage in the evolution of AI and its disruptive technology cousins. As a result, no one knows for sure the likely scale of activity automation and job losses or, conversely, the amount of opportunities that could be created by AI—either within existing businesses or in the new sectors and firms that are emerging. To help explore the possibilities, here we examine some of the ways in which AI could impact financial services and enable new FinTech ventures, particularly regarding robo-investment and chatbots.

Part of the reason that interest, experimentation, and adoption of AI is accelerating is that major “cloud services” providers such as Amazon, Google, and Salesforce, are making relatively low-cost AI services available to firms of every size. This enables customers to apply sophisticated machine learning-based AI tools to the manipulation of very large datasets, providing a real boost to start-ups and smaller firms that would not normally have the R&D resources to develop such applications on their own. This sort of AI as a Service model is spawning several start-ups –especially in the FinTech space– and enhancing the offerings of already-established companies. The overall effect is to raise the capability, reach, and competitiveness for all small- and medium-sized businesses.

The financial sector examples below should help illustrate which particular jobs or tasks AI would handle easily, and highlight the new opportunities that could arise once humans are freed from those tasks. We find it balances the discussion a little to put some attention on the possible positive developments that could also unfold, including the creation of entirely new jobs.

Robo-Investment

At the moment, the investment sector is anticipating widespread replacement of humans by bots and algorithms—and with good reason. Many current sector roles focus largely on numerical analysis of trends and performance charts, a task which AI can perform more rapidly, comprehensively, and reliably than most humans. In recent months we’ve seen Blackrock, the world’s largest asset manager, announce that 50% of its human fund managers are underperforming the market trackers, and that it is undertaking a program of replacing them with AI-based algorithms. A range of AI fund management tools have also come to market recently. For example, numerai is a crowd- sourced investment tool with over 7,000 data scientists contributing to its development. LendingRobot is an AI algorithm-managed hedge fund that invests in lending marketplaces, charges fees significantly lower than other human-managed funds, and does all its reporting via blockchain.

In the future, it’s possible that AI investment tools will predict interest rates, currency movements, and other economic indicators. For example, the advisory firm PwC has developed an algorithm with 92% accuracy in predicting national GDP. Rapid advances in the ability of AI to crunch massive amounts of financial data make its application to investment processes a no-brainer. The rapid automation of finance means that analysts, traders, brokers, advisors, and even personal bankers could at least partially be replaced by the technology.

But it is shortsighted to just think of job losses. Most current AI-based tools are learning their craft from humans, so the latter will still be required to deal with new situations and more complex requirements. We also think the technology frees people up from the “dishwashing”—i.e. routine and mundane tasks—to focus on the more creative challenges of customer engagement, designing new products and services, crafting solutions to complex internal and client challenges, scanning for what’s next, and doing genuinely game changing thinking. Clearly, realigning staff to these new roles will require individual and corporate investment in training and personal development to ensure the desired mind shift and capability building take place.

At the same time, emerging AI-powered FinTech concepts have tremendous potential to create entirely new and interesting roles and occupations. For example, banks have massive amounts of consumer spending, savings, and investment data to feed into AI algorithms; however, delivering value to clients will require humans with financial literacy, new expertise, and insights which could become the foundation for customer seminars and personalized financial planning services. This could represent a return to more traditional roles for the local bank manager.

New services and business models might be generated from the large amount of information that proprietary algorithms would make available cheaply and easily. Relationships with customers can be given priority in this scenario, which would also require new job roles and capabilities, such as people skills and emotional intelligence, not to mention coding to build the algorithms. Finance employees working alongside AI could evolve into roles that are primarily creative, educational, and supportive—which seems like a very human complement to an otherwise highly automated experience.

New players entering the FinTech scene have the blessing of zero legacy to deal with. Hence, they can start from the outset by focusing on their end-customers and designing solutions entirely tailored to their needs, be that investment, transactions, or insurance. An example would be Monzo, a constantly evolving personal finance app built entirely around the way some segments of society now lead their lives. In such cases, humans are still generally far better suited than AI software for tasks like understanding potential customers, co-creating solution concepts, prototyping, and ultimately building and refining the resulting services. In addition, new players have to build alliances, raise finance, market themselves, develop social media buzz, prove their capabilities to would-be partners and customers, and deliver ultra-fast service responses. Again, in a relationship-driven world, these are all roles for which humans will still have the edge for some time to come.

Chatbots

Already several banks such as Royal Bank of Scotland, Swedbank, Bank of America, and Capital One are using customer-facing bots to take requests, answer simple questions, and perform basic tasks via mobile devices, Facebook, and other platforms like Amazon Alexa. These service offerings are extending in scope and functionality. For example, messaging app Kik is releasing its own cryptocurrency tokens as a digital currency similar to Bitcoin for use within its platform. Called Kin, the cryptocurrency can presently be spent in interactions with a chatbot to buy services and products on Kik. In the future, users could also engage in peer-to-peer commerce using Kin. Such apps suggest that routine banking roles of teller, service agent, loan officer, and supervisor could all be considered ripe for automation or elimination.

Indeed, AI already lends itself well to roles requiring high volume data processing, consistency, and attention to detail. So, what new roles might emerge? For example, rather than view the human-staffed bank as doomed, it might be more inspiring to think of it as a future messaging app or social media site; rather than fire entire labor pools and replace them with robots, banks could flip the model and turn branches into “experience and learning centers.” Here staff would facilitate conversations to help customers solve problems together, connect with each other, and design new products. They could transition veteran workers into roles focused on development of meaningful experiences to touch on the day-to-day lives of customers—for example, helping them learn how to use tools such as new FinTech applications, messaging apps like Kik, and social media platforms like Facebook.

Some displaced workers might find alternative livelihoods working for the FinTechs or participating in projects such as Kin. For example, current uses of Kin include tipping others for making outstandingly good posts or shares on the platform—humor, for example, is rewarded. This might be the kind of activity that could replace a “job” in the future, with income gained via performance on social media or in virtual communities of some kind, paid in cryptocurrency.

The Post-Job Future

Companies that simply slash workforces in the name of efficiency without exploring the bigger picture could be throwing out the baby with the bathwater. The risk is that entirely automated organizations will become undifferentiated and commoditized without human ingenuity to drive constant innovation. Automation of jobs provides an opportunity to tap a vast pool of employee experience for meaningful value in the quest to develop new services and products. Veteran financial workers could be viewed as an important source of knowledge of what working in a bank is really like, and what true customer needs are. A robot can post deposits and certify documents quickly and consistently; however, designing, building, and training an in-branch chatbot is a job best carried out currently with human input. Complementing AI investment tools with behavioral and motivational advice from suitably trained staff could help customers increase their returns, generate higher profits for the banks, and create new opportunities for those with different skillsets.

It is important to acknowledge the reality of workplace automation: Experts predict up to 50% of all jobs (or more) could disappear by 2035, while others suggest that only 5% might disappear while 65% could be affected materially. However, it is much harder to predict the extent to which they will be replaced by roles that have not yet been invented, in firms yet to be born, in industries that are only just emerging. As we said at the start, predicting the outcome is nigh on impossible this early in the game. That AI will impart both creative and destructive effects is a fact of the coming technology revolution that can give us hope and guide more human-centered decisions. The key is to start acting now to train employees with new skills and start creating the new, more customer-oriented and creative roles in anticipation of relatively rapid changes on the horizon.

• How can we capitalize on the changes AI and FinTech might bring to the relationship between financial service providers and customers?
• How can we harness and nurture the wisdom of veteran employees?
• Could AI help technology companies take over the financial industry, or might it help financial service companies to consolidate their position?

This article is excerpted from Beyond Genuine Stupidity – Ensuring AI Serves Humanity. You can order the book here.

Image: https://pixabay.com/images/id-4321886/ by geralt

By Steve Wells, Rohit Talwar, Alexandra Whittington, April Koury, and Maria Romero

How might blockchain technology enhance trust and authenticity in the travel experience?

In today’s travel industry, authenticity has become a powerful draw. Travelers increasingly want authentic experiences—providing cultural insights while avoiding mass travel packages. Authenticity embraces honest advertising and customer experience, factors that industry providers have total control over. Now, there is a high-tech disruptor emerging that could help travel industry businesses offer greater authenticity and share the benefits with customers in numerous ways: blockchain.

Blockchain is the transaction tracking platform for Bitcoin, the leading digital cryptocurrency. Blockchain is a secure public ledger that that can capture and encode all transactions in any given currency and a range of other types of information such as traveler details. Globally, numerous cryptocurrencies are available, each with its own blockchain.

In the future, some or all nations may have their own digital currency; however, the borderless cryptocurrency concept rather defies notions of nation-states, sovereign currencies, and centralized banks. Imagine travelers unburdened by exchange rates or bank fees and providers accepting payment from anyone who has a digital wallet. At the philosophical level, blockchains and cryptocurrencies embody a rebellion against intermediaries like banks and credit card companies.

Payments are the most obvious and immediate travel application, and progressive vendors aware of blockchain’s potential are beginning to accept cryptocurrency payments. From a purist’s perspective, a blockchain renders banks unnecessary middlemen—speeding “peer-to-peer” payments between buyer and seller.

Eventually, blockchains could enable entirely new forms of value, e.g. future cash alternatives could be invented and tracked on blockchains, including “sharing” points earned on social media sites, credits for community involvement (e.g. after school tutoring), or rewards for contributing to neighborhood recycling, sustainability, and conservation efforts. Just as hotel and taxi operators ignored the disruptive and costly impact of simple customer-centric apps like Uber and Airbnb, could blockchain weave new and unnoticed threats into the tourism ecosystem?

The tourism industry is increasingly basing growth strategies on personalization—loyalty schemes and targeted marketing programs that rely on knowing the individual’s identity. However, a blockchain protects personal identity, anonymizing users, enforcing secure validation, and making identity theft impossible. Whilst immigration authorities would still need proof of identity, the rest of the industry value chain might only know of you as authorized traveler #6759704.

On perhaps a more positive note, blockchain customer validation could diminish queues and wait times as a lot of the processing could take place in transit. Over time, travelers could also regain a feeling of anonymity and freedom, rather than one of being surveilled, tracked, and owned. If we can link the human in front of us to their unique blockchain profile (possibly through biometrics), all other ID checks become irrelevant.

If we choose, our blockchain personal identities could contain more than just passport information—preferences could be shared during the trip, so every service along the journey can be uniquely tailored without ever knowing our name unless we provide it. For providers, the consequences of a cyberattack are greatly diminished as the underlying customer data is anonymized and secure.

Blockchain is poised to have a potentially dramatic impact on travel in the next 5 to 10 years. Blockchain could disrupt every step of the industry value chain by mainstreaming alternative currencies, securing irrefutable identities, reducing transaction costs, and challenging current marketing thinking. Indeed, blockchains, coupled with other exponentially accelerating technologies like artificial intelligence, cloud computing, hyperconnectivity, and the Internet of things, could transform society.

The challenge for travel sector leaders is to ensure that their organization has deep and widespread understanding of the nature of these new technologies and the previously unimaginable travel concepts, service offerings, business models, operational challenges, and strategic options they could enable. At the heart of the challenge is digital literacy and the mindset change that goes with it. Within twelve months we’ll be bored of talking about the need for mindset change—best to get a head start.

• What might be the biggest impacts of blockchain for the travel industry when coupled with other potentially disruptive technologies like artificial intelligence or the Internet of things?
• How might blockchain affect the travel industry’s marketing strategies going forward?
• As customers, under what circumstances would we want to share our personal data if we didn’t need to?

This article is excerpted from The Future Reinvented – Reimagining Life, Society, and Business. You can order the book here.

Image: https://pixabay.com/images/id-4051664/ by geralt

By Rohit Talwar and Alexandra Whittington

What are the implications for architectural design of a world that may have fewer jobs?

All the discussion surrounding the impact of artificial intelligence (AI) on jobs raises the question: What could dramatic shifts in employment patterns mean for the built environment? Firstly, a significant proportion of the built environment has up to now been designed for people-centered economic activities—offices, shopping centers, banks, factories, and schools. Over the next 10-20 years, these may house 50% or less of the number of current workers with far fewer physical customers. Furthermore, with the rise of AI, some organizations might run on algorithms alone, with literally no human staff.

The future of jobs is not just about employment, but also about larger societal shifts with dramatic impact on the use of space and resources. Indeed, AI is increasingly likely to provide a meta-level management layer, collating data from a range of sources to monitor and control every aspect of the built environment and the use of resources within it.

Today, at the dawn of the AI revolution, some of the latest technology coming at us involves mixed reality. There is a buzz about how we can apply advances in virtual reality (VR) and augmented reality (AR) in places of work, education, and various commercial settings. Teaching and training are exemplary uses, enabling dangerous, rare, or just everyday situations to be simulated for trainees. Such simulations also provide the nexus point for humans to work alongside AI. For example, robot surgeons might do the cutting, while a human surgeon looks on remotely via video or a VR/AR interface. How might places be redesigned to accommodate this human-AI hybrid job future? The outcome could be spaces that embrace the blurring of physical and digital worlds, possibly with multi-sensory connection points between the two.

The coming waves of AI in business and society could impact the future design, use, and management of buildings in dramatic ways. Key design features, including construction, security, monitoring, and maintenance, could be coordinated by highly automated AI neural networks. For example, future office buildings might make intelligent responses to their inhabitants’ moods or feelings to increase productivity of humans in the organization—varying lighting, temperature, background music, ambient smells, and digital wallpaper displays according to the motivational needs of each worker.

In the post-work, “shared infrastructure economy,” architects could also factor in “multi-purposing” in the design of new buildings and the remodeling of existing ones. For example, why couldn’t schools double as courtrooms, doctor’s meeting rooms, social centers, and libraries in the evenings and during holidays? Empty space could become more and more of a liability to towns and cities as retail and education move online. In the US, up to 1,000 retail outlets a week are currently being closed. In response, a Texas firm has suggested  a design for old shopping malls and retail outlets as drone ports, for example. Other options might include repurposing them as maker spaces, community centers, pop-up cafes, and adult learning outlets. The pace of automation of retail and commerce is likely to be exponential: Imagine a chatbot that could coordinate drone deliveries of the groceries ordered by web-connected smart refrigerators that run on IBMs Watson AI platform. Intuitive and predictive AI seems set to revolutionize the home and business.

As advances in the cognitive sciences accelerate, there is growing fascination with the idea of neuro-architecture as control mechanism in a post-work society: Will mass automation and efficiency expectations justify the construction of buildings that are responsive to people’s needs, read their moods, use biometrics, and conduct behavior-conditioning of employees? There are many reasons to think these strategies could become accepted practice. Many AI analysts argue that, rather than compete with robots, humans will do more meaningful and important work than ever. Hence, the use of building design to evoke certain feelings, enhance moods and creativity, and the use of behavioral insights to motivate the workforce could provide an important advantage in the new “cobot” normal of humans working alongside intelligent robots.

As work becomes automated, it also becomes more cloud-based, and fewer offices need the amount of space they once did or for the purposes space once served. New uses of space to accommodate virtual AI workers and to provide a comfortable environment for human employees will be in demand. Furthermore, replacing actual workers with code means the layout, design, and supplies necessary for the typical office would completely change. The role of AI in reducing the amount of people and “stuff” places must accommodate should open up considerable opportunities for building redesign.

Designing to a post-job future doesn’t necessarily mean that high-tech has the advantage. There will be valuable opportunities to inject a touch of humanity to key settings where people will interact with AI—work, home, and public spaces. The rise of AI means we must consider different visions of the future where 50% or more of the workforce could be automated out of a job, and the new sectors haven’t taken up all the displaced individuals. With the right perspective, positive design adjustments can help make the post-work future meaningful and more human. However, the transition will be challenging for all concerned.

• How might retrofitted building infrastructures interact with the cutting-edge technology of newer constructions?
• How can we effectively incorporate AI, VR, and AR into built environments?
• How might the design and construction of offices, houses, schools, and stores be altered by the post-job society?

This article is excerpted from Beyond Genuine Stupidity – Ensuring AI Serves Humanity. You can order the book here.

Image: https://pixabay.com/images/id-4272879/ by geralt

A version of this article was originally published in Blueprint Magazine.

By Steve Wells and Rohit Talwar

The Future of Business is the first book in the Fast Future series.

This book is aimed at the leaders of today and the pioneers of tomorrow. Our intention is to provide a broad perspective on the key forces, trends, developments, and ideas that could redefine our world over the next two decades. The intention is to highlight how these “future factors” are shaping the opportunities, challenges, implications, and resulting choices for those driving the future of business. The book draws on the ideas of over 60 futurists, future thinkers and experts in a range of domains from 22 countries on four continents.

Fundamental questions

In a world of constant and ever-more fundamental change, those charged with leadership, management and stewardship of large and small organizations alike are faced with a set of questions many of us never thought we would have to confront. These questions are becoming more prominent and real as we develop a better understanding of, and feeling for, the disruptive potential of what’s coming over the horizon. So what are these questions that are making their way from fun discussions among futurists, innovators, and would-be world changers to the top of the business agenda? Well, here are ten that we see being discussed more frequently at the top table:

• Strategy – How do we compete and make a profit in a world where automation and digitization are shortening business cycles, accelerating change, and driving the commoditization of many goods and services?
• Workforce – How do we manage and motivate a workforce that could span in age from 16 to 90 years as people’s life expectancy rises and, in order to survive, they are forced to keep working long past the historical age of retirement?
• Human Enhancement – What’s the impact on our business and the commercial opportunity arising from people using scientific advances to enhance the performance of their brains and bodies?
• Resources – How will we produce our products if scarce natural resources run out or are rationed?
• Mindset – Can we transfer exponential thinking from the technology world to other domains to address society’s grand challenges in areas such as diversity, healthcare and education, and overcome the scarcity of key resources such as food, water and rare earth metals?
• Artificial Intelligence – How close is the day when smart technologies such as artificial intelligence (AI) could replace 50 per cent or more of the workforce?
• Automation – What could the fully automated company of tomorrow look like, and who will buy our goods and services if technology is eliminating jobs at every level of the workforce?
• Unemployment – If technological unemployment results in 30 to 50 percent or more of the workforce being permanently unemployed, will we need a universal basic income and how will it be funded?
• Money – How might the nature of money and financial systems evolve – what impact could these developments have on our business?
• Purpose – What would be a sustainable driving purpose and societal role of business in a world being transformed by all these forces of change?

The Future of Business is designed to explore these questions and many more. Through their contributions, the authors help to illuminate the future factors shaping tomorrow’s agenda, explore the resulting implications, and highlight the emerging choices for business leaders.

What’s driving the change agenda?

Why are all these questions appearing in parallel – what’s driving the need to tackle such a wide range of game changing issues at the same time? Throughout history, people have understood that tomorrow’s business landscape will be shaped and influenced by the world around us. What is perhaps different today is the sheer speed at which our world is being transformed rapidly by a convergence of science-led innovations and the ideas they enable. We are entering a fascinating period in our history, where science and the technologies it spawns, are now at the heart of the agenda.

Our thinking about the future of society, government, and business is completely intertwined with the path of technological progress. Convergence between disciplines such nanotechnology, biotechnology, information and communications technology (ICT), and the cognitive sciences is opening up a world of possibilities – many of which are emerging within weeks and months of each other.

These rapid and groundbreaking advances are creating the potential for humanity to evolve in almost unimaginable ways. These developments underpin and drive the need for new thinking and create new possibilities for the future of business.

These forces of change are also at play in the broader economy. They are combining with a general thrust towards increased globalization, rapidly evolving economies, shorter and faster business cycles, and the rise of cyber currencies. They are driving digital transformation – the rapid automation and digitization of work and the workplace. The rise of AI and robotics in particular are driving a debate about how far we should allow such technologies to permeate our lives, and the risks of technological unemployment, as even professional knowledge workers’ roles are automated on a permanent basis. Developments such as blockchain technology are creating transparent electronic public activity ledgers that have the potential to revamp the nature of trade, contacts, and transactions in every sector. Indeed some argue that they could lay the foundation for a reworking of the entire economic system.

New possibilities, new strategies, new leadership mindsets

In the context of such rapid and wide-ranging changes, determining the future of business takes on far greater importance than simply defining the next three-year strategy and revenue targets. Fundamental questions are being raised about the purpose and nature of business, its relationship with society, and the meaning of profit in tomorrow’s world. The answer to these will in turn drive us to re-evaluate the importance of brands, design and culture, and how to educate tomorrow’s workers and citizens. Finally they have dramatic implications for national identity, values and governance.

Collectively these forces and our responses to them will drive disruption, renewal, and transformation in every sector. They will shape the future of business. In response to this “perfect storm” of change on the horizon, leaders in every current and emerging sector will be challenged to think hard about future strategies. New “conscious leadership” perspectives are required on how to deal with disruptive entrants and how to evolve products and services in the face of digital disruption. We are being forced to rethink manufacturing and distribution strategies, evolve business models and organization designs, and learn how to ensure effective stakeholder engagement in a fast-changing world.

As leaders, we will be challenged to determine our responsibility around job creation – how can we ensure that people are earning the money to buy the goods and services we produce? These transformative changes and choices are in turn raising fundamental questions on the future nature and capabilities required of leadership and management. They will also shape our thinking on how to attract, develop, and retain the type of talent needed across the organization to ensure future relevance and growth. These are the issues which our authors explore in The Future of Business.

The aim and structure of the book

This book is designed to provide wide ranging visions of future possibilities and take us on a tour of the forces shaping the political, economic, and social environment. We explore the advances in science and technology that could have the greatest impact on society and drive business disruption. We examine the implications of these for how business will need to evolve and the new industries that could emerge over the next two decades. We highlight key tools, approaches, and ways of thinking about the future that can help organizations embed foresight at the heart of the management model. We conclude with a framework that highlights key choices we face in shaping the Future of Business.

We took an organic approach to the design of the book – allowing potential authors to propose topics, choosing those that would have the most relevance and resonance and then allowing a natural structure to emerge based on the content they provided. As a result, the book is structured into ten key sections, these are summarized below:

• Visions of The Future presents a series of broad perspectives on the global shifts on the horizon as a result of the ideas and developments discussed elsewhere in the book.
• Tomorrow’s Global Order examines the emerging political and economic transformations that could reshape the environment for society and business.
• Emerging Societal Landscape explores the changing fabric of society – who we are becoming and how we will be educated, finance our futures, and choose where to live.
• Social Technologies highlights how tomorrow’s technologies could permeate our everyday lives and blur the boundaries between humans and machines.
• Disruptive Developments explains the nature and potential impact of new technologies that will enable large-scale and transformative business innovation.
• Surviving and Thriving discusses how business can adapt to a rapidly changing reality and identifies some of the critical success factors for business in a constantly evolving world.
• Industry Futures looks at how old industries might change and identifies a range of new ones that could emerge
• Embracing The Future introduces a range of futures and foresight tools, methods and processes that businesses can use to explore, understand, and create the future.
• Framing The Future provides a set of views outlining why and how organizations should look at the future.
• Conclusions sets out a framework to help leaders respond to the ideas presented in the book to drive future strategy and navigate uncertainty and a rapidly changing reality.

This article is excerpted from The Future of Business. You can order the book here.

Image: https://pixabay.com/images/id-4331974/ by geralt

By Steve Wells, Rohit Talwar, Alexandra Whittington, and Maria Romero

How might the role and value of HR and training evolve in the rapidly evolving future of business?

Technology and its many uses promise to reshape society and business in dramatic ways in the decade ahead. The arrival of the Fourth Industrial Revolution—characterized by smart machines—will force a fundamental rethinking of the nature of firms and markets, organizational roles and designs, and people’s place and value within them. Whether we pursue the path of using technology to eliminate the workforce, or to truly unleash human potential, HR and training should be central to the business transformation process. The rapidly changing reality of business will undoubtedly create new opportunities, sweet spots, and stress points for HR and training.

Should we wait for disruption and future shocks before we respond? Alternatively, are there practical steps we can take now to prepare for a range of possible outcomes and thereby increase our resilience in the face of uncertainty? Here we explore actionable ideas to help HR and training prepare for the inevitable surprises that these changes might bring.

Tomorrow’s world of work will be shaped in large part by artificial intelligence (AI) combined with successive waves of exponentially improving, transformational science and technology developments such as blockchain, big data, hyperconnectivity, cloud computing, the Internet of everything, 3D/4D printing, synthetic biology, new materials, and human brain and body enhancements.

These developments could make the typical user experience of office technology far more interactive than ever before, with smart technologies that seem to respond and evolve based on users’ needs and wants. Soon, the workplace might be populated by humans, robots, digital entities (i.e. algorithms), and hybrid augmented human workers performing side by side, each with a say in how things get done.

In the face of such potentially seismic changes, the first step is for business leadership and the HR and training functions to decide on the future role they should be playing in helping the organization prepare for and navigate potentially transformational change. For example, there is an emerging spectrum of possible roles for HR, from administering people procedures through to ensuring the organization has awareness of and access to all the resources required to secure future business success.

In the future, an evolved “resourcing function” might have a remit that ranges from capability and workforce planning to internal staffing, and procuring external partners, services, technologies, research, and advice. Hence the Chief Resourcing Officer might work in tandem with the Chief Operating Officer to guarantee the latter has access to all the elements required to transform and run the business.

A key driver for HR’s evolution is that the potential future applications and impacts of AI and its sister technologies are almost limitless and unknowable. We are too early in its evolution to know how far AI could replicate and ultimately exceed the human brain’s capabilities. Predicting the reactions of humans, businesses, governments, and civil society is almost impossible as there is limited understanding across society today of AI’s true potential. There is seemingly even less willingness to think deeply about the possible impacts and consequences. Hence HR has the opportunity to step into the vacuum to start anticipating and preparing for inevitable surprises.

Forecasts vary of how many jobs could be replaced or created by technological disruption. Whether 80% of jobs are eliminated or 50% more created, the new jobs will require advanced skillsets and different mindsets. The transition will be dramatic, painful, and require new knowledge and competences. Governments, businesses, and civil society will need to rethink the assumptions and mechanisms that underpin our world. Human resources and training could become central to helping envision different possible futures and helping organizations get there.

Already, in business, fundamental changes are taking place in the way organizations are using technology. Many are embarking on radical digital overhauls, enabling them to deliver new offerings, enhance service, improve efficiency, and increase cost competitiveness.

The emerging technologies of the corporate ecosystem will have economic, social, and environmental implications that change the workforce, work models, and people development. Digital transformation is likely to spread throughout the business world, and wide-scale automation will inevitably lead to job reductions across economic sectors—from mining and manufacturing, to transport, retail, and finance.

In parallel, new sectors are emerging and creating opportunities. Under favorable conditions, the global economy could grow from about US$75 trillion in 2017 to around US$120 trillion over the next decade—over half of this could come from industries and businesses that are just emerging or don’t yet exist. No one yet knows if these newcomers will generate enough jobs to replace those displaced by technology.

While there might be a temptation and tendency to wait and see because the challenges seem so immense, this could be calamitously risky. The changes will cascade and accelerate rapidly, overwhelming and paralyzing unprepared governments, businesses, societies, and individuals.

Strategically, it seems far more prudent to prepare for a range of possible scenarios and to try to anticipate impending shocks and risks. The insights can help us to act now to start putting society and business on a more sustainable footing, thus ensuring sufficient resilience to cope with the risk of large-scale technological unemployment. Here we identify five fundamental actions that forward-looking organizations, governments, societies, and individuals should be thinking about right now. These factors could occupy an increasing amount of the workload for HR and training.

1. Rethinking Education at Every Level

Success in the future will require a smart, adaptable, and highly educated workforce. Indeed, many commentators and some governments anticipate that within a decade, most new jobs will require graduate level education at a minimum. How those qualifications are acquired may well look very different to today.

To survive and thrive in business, there is a need to understand both the technologies and the mindsets shaping the future. Mindset is key here—there are plenty of technological competitors to Uber and Airbnb—for the latter, their true point of difference is their mindset, a radically different way of thinking about how to deliver on customer desires without owning any assets or employing any service delivery staff.

Job one for HR and training must be raising technological literacy. We must ensure that, throughout the organization, leaders, managers, and employees truly understand these future-shaping technologies, how they might impact different sectors, and the new ways of thinking, business models, and delivery approaches they are enabling. Much of the required content is already available through free online platforms—the key is building it into the training and development agenda.

People will also need support developing higher-level skills that will help them learn rapidly and transition into jobs that don’t even exist today. These skills may include collaboration, problem solving, navigating complexity, scenario thinking, and accelerated learning. Clearly, businesses can play a major role here in helping their own staff transition to new roles in the organization or new jobs elsewhere.

More broadly, we also believe a massive increase is required in the provision of free adult education across society. This could be done using existing facilities in businesses, schools, and higher education institutions. Most teaching and meeting spaces in these facilities are unused in the evenings; why not put them to use for continuing adult education? Some of the teachers and lecturers would ideally come from the emerging growth sectors of the future—helping students understand their context and mindset.

Pupil-teacher ratios at school level will also need to be reduced to increase personalized support–the evidence is clear on the impact. This also means re-evaluating the expectations for students pursuing higher education: A well-educated workforce is needed to propel the country forward, and while many other nations provide free degree level education, some still need to develop a sustainable solution that doesn’t leave future generations demotivated, disillusioned, and saddled with debts that many cannot repay. Employers can play a big role here in lobbying government to think strategically about the financing of higher education.

Education and work have shaped the way society functions. Redefining both of these fundamental institutions will generate a series of opportunities for HR including:

• Compulsory participation in technology awareness programs for those seeking promotion.
• Providing immersions on critical technologies and their possible impacts.
• Developing life-long and life-wide learning paths to support employee education beyond the organization itself, and growing such programs to include workplace coaching and training in diverse life skills and knowledge such as accelerated learning, problem solving, career path planning, and collaboration.
• Embracing such life-wide learning programs might incorporate the accrual of education microcredits or nano-credits, which would be similar to video game badges. Sensors and self-quantification would certify achievements in and out of the classrooms, so the nano-credit system could become completely automated.
• Developing closer workplace-school relationships, e.g. workplace experts instructing vocational classes at schools, students visiting workplaces regularly, providing physical community learning spaces, and involving corporate HR teams in the development of schools’ curricula.

2. Experimenting with Guaranteed Basic Incomes and Services

Firms pursuing high levels of automation will need customers to buy their goods and services; however, widespread automation could dramatically reduce employment and societal purchasing power. Hence, many in Silicon Valley in particular argue for some form of automation tax to fund the provision of unconditional basic incomes (UBI) and services (UBS) across society. Some governments reject the idea on ideological grounds because they think it reeks of socialism or communism.

A number of governments also recognize that something needs to be done to avoid large-scale social decline and potential citizen unrest. Countries including Finland, Germany, and Canada have undertaken UBI experiments to understand the concept, test out different options, assess the social impact, measure the costs, and prepare themselves while they still have time. For HR, this could mean:

• Taking the lead role in modeling alternative future workforce strategies.
• Educating the workforce on the importance of taking control of their own earning capacity.
• Assessing the potential business impact of automation taxes based on different workforce scenarios.
• Providing support to help displaced workers access new skills and jobs.
• Lobbying governments to conduct early pilots of alternate UBI/UBS models to avoid being caught flat-footed as and when technological unemployment starts increasing.

3. A Massive Expansion of Support for Start-Up Creation

While the jobs outlook is uncertain, the only thing we can assume for certain is that people will need to take more responsibility for their incomes. Many will do this through the creation of small and micro-businesses that are far more immune to the risks of technology replacing humans. Employers can play a massive role here in providing start-up training and mentoring through the early phases of business creation for employees they are replacing with technology.

The most forward thinking businesses might even co-invest with such start-ups to help them get going and potentially provide them a route to market. A massive expansion of support for start-up creation would both generate jobs for the mentors and accelerate the rate at which people can build new businesses and create new jobs. In addition, HR could:

Provide access to simple online platforms for business creation, marketing, networking, financial management, invoicing, accounting, and tax submission, enabling founders to focus on the development of their business.

• Encourage and support staff to spin out innovation initiatives from within the firm as separate businesses, possibly with financial support.
• Provide an incubator space and mentoring support for employees to work up new ideas in their spare time prior to starting out on their own.
• Create regular showcases to enable past employees to present their business offerings to potential customers.
• Commit to buying a certain amount of goods and services from firms run or managed by past employees.
• Provide a panel of executives who could act as ongoing advisors to start-ups for their first few years in business.
• Provide crowdsourcing platforms where past employees could trade ideas, requirements, and opportunities with each other.
• Provide new ventures with a blockchain based smart contract service so that contract creation and execution can be fully automated against standard rules.

4. Research and Development in Key Knowledge Sectors

A competitive economy demands cutting edge innovation. Not all R&D lends itself to assessment based on the return on investment—some just has to be undertaken for the betterment of society. Hence, expanding research funding and the number of research institutions are important enablers of tomorrow’s job creation. While the firm’s core R&D agenda might be driven by other functions, HR could play a key role in ensuring governments understand the knowledge base and skills sets required to feed to future of business.

The pace of change within organizations also opens up a role for HR and training to lead research into the capabilities required to run and grow tomorrow’s enterprise. These might include:

• How best to educate and train leaders, managers, and employees on critical technologies and their applications within the business.
• How best to manage and mentor in environments populated by humans, robots, AI, and augmented individuals.
• Researching the possible future evolution of their core business and adjacent sectors to identify the skills that might fuel the industry.
• Exploring what other new knowledge pools need to be developed to serve the future needs of the business.
• Helping the organization to master the skills required by the leadership of the future, such as foresight, collaboration, empathy, soft skills, and comfort with complexity and uncertainty.

5. Addressing the Mental Health Challenge

Across society, the scale and severity of mental health issues are rising, a trend that large-scale job displacement is likely to increase. An enlightened, combined approach for government and business would be to fund people to train as therapists while still working today. This would ensure that they will be ready to help when the challenge becomes a major problem in a few years’ time. For HR, there are clear priorities here:

• Increasing the provision of mental health support in the workplace, especially in the run up to and during massive layoffs.
• Reinforcing the importance of mentally healthy employees and discouraging the workaholic culture.
• Providing multigenerational therapy to cope with conflicts that emerge from divergent generational worldviews in the workplace.
• Encouraging employees to develop interests and personal identities beyond their occupation.
• Supporting cultural and behavioral change in areas of the organization where the management style and operating culture increase workplace stress.

Preparing for the Next Future

There’s clearly a cost associated with enabling all of the five activities, but the question must be raised: What might the risks and potential costs of inaction be? A short-term focus on cost control could lead to a very long-term increase in the cost of funding unemployment benefits and policing a society that feels let down.

The future could be a very exciting place where society can tackle current challenges and create new opportunities. New industry sectors such as laboratory grown food, vertical farming, autonomous vehicles, clean water technologies, renewable energy, and synthetic materials all hold great possibilities for humanity. However, these businesses will be highly automated from the outset, and will require very different capabilities and a highly skilled workforce. The transition to these new roles will not be smooth but, as Albert Einstein once said, “In the middle of difficulty lies opportunity.” For HR and training, there is tremendous potential here to play an enhanced strategic and operational role in ensuring a very human future.

• How might we start the conversation about HR and training playing an enhanced strategic role in the organization?
• What might be the strategic and operational priorities for a new organizational resourcing function?
• What capabilities might be required to lead and manage diverse work teams composed of humans, augmented humans, AI, and robots?

This article is excerpted from The Future Reinvented – Reimagining Life, Society, and Business. You can order the book here.

Image:https://pixabay.com/images/id-4321833/ by geralt

By Steve Wells, Rohit Talwar, and Alexandra Whittington

How might society need to reframe our notions of jobs and incomes in the age of automation?

A New Economic Dialogue

In this article, we explore three alternative futurist perspectives on how advances in technology could impact notions of employment, jobs, and income.

Rohit Talwar – Let’s Not Wait to Find Out

Fundamental changes are taking place in the ways organizations are using technology. Many are embarking on radical digital overhauls to enable them to deliver new offerings, enhance service, improve efficiency, and increase cost competitiveness. The reality is that widescale automation will inevitably lead to job reductions across everything from mining and the manufacturing industries to transport and the legal sector.

New sectors are of course emerging and creating opportunities—but no one yet knows if they will generate enough jobs to replace those displaced by technology, or how long that might take. Some estimates suggest up to 80% of all current jobs could be digitized. New industry sectors such as laboratory grown meat, vertical farming, autonomous vehicles, and synthetic materials will be highly automated from the outset, requiring very different capabilities and a highly skilled workforce. The transition to these new roles will not be smooth for the production worker, shift manager, warehouse assistant, sales person, truck driver, or even lawyer whose jobs are at risk.

While there might be a tendency to “wait and see”—this could be calamitously risky. The change when it happens will cascade and accelerate, rapidly leaving unprepared governments and societies in a paralyzing state of shock. I believe it is far better to anticipate impending disruptions and risks and act now to start putting society on a more sustainable footing—thus ensuring it is resilient enough to cope with the risk of large-scale technological unemployment.

I believe there are five fundamental actions that forward-looking governments should be taking right now.

1. Experimenting with Guaranteed Basic Incomes and Services

The firms doing the job automation need customers to buy their goods and services. Hence, we see many in Silicon Valley arguing for some form of automation tax to fund the provision of universal guaranteed basic incomes (UBI) and services (UBS) to everyone in society. Some governments refuse to countenance the idea on ideological grounds because they think it reeks of communism. However, others are recognizing that something needs to be done to avoid large-scale social decline and potential citizen unrest. Hence, many countries including Finland, Germany, and Canada are undertaking UBI experiments to understand the concept, assess the social impact, measure the costs, and prepare themselves while they still have time.

2.  A Massive Expansion of Support for Start-Up Creation

People will inevitably have to take more control of their own destiny. One way is to create their own job or small business that is far less immune to risks of technology replacing humans. A massive expansion of support for start-up creation would accelerate the rate at which people can build new businesses and generate jobs for the mentors.

3. Research and Development in Key Knowledge Sectors

A competitive economy demands cutting-edge innovation. A safe society requires research and development on the materials and processes that will enable that. Not all R&D lends itself to assessment based on the return on investment—some just has to be undertaken for the betterment of society. Hence, expanding research funding and the number of places is an important enabler of tomorrow’s job creation.

4. Rethinking Education at Every Level

Success in the future will require a smart, adaptable and highly educated workforce. Indeed, many commentators and some governments anticipate that within a decade, most new jobs will require a graduate level of education as a minimum. How that is acquired may well look very different to today.

To survive and thrive I think everyone will need to understand both the technologies and the mindsets shaping the future. Uber and Airbnb have lots of technological competitors—their true point of difference is their mindset—a radically different way of thinking about how you deliver on customer desires without owning any assets or employing any of the service delivery staff. We also need to help people develop higher-level skills that will help them learn rapidly and transition into jobs that don’t even exist today. These include collaboration, problem solving, navigating complexity, scenario thinking, and accelerated learning.

Hence, I believe we need to massively increase the provision of free adult education using existing facilities at schools and higher education institutions for delivery—most are unused in the evening. We also need to reduce pupil-teacher ratios at school level to help with personalized support—the evidence is clear on the impact. This also means looking at the charges imposed on students pursuing higher education—we need a well-educated workforce to propel the country forward—many nations are providing free degree level education. Countries like the UK, that charge for tertiary education, need a sustainable solution that doesn’t leave future generations demotivated, disillusioned, and saddled with debts that they cannot repay.

5. Addressing the Mental Health Challenge

Across society, the scale and severity of mental health issues is rising. Large-scale job displacement will only increase that. An enlightened approach would be to fund people to train as therapists while still working today so that they will be ready to help when the challenge becomes a major problem in 2-4 years’ time.

There’s clearly a cost associated with enabling all these activities, but we have to ask ourselves of what the risks and potential costs of inaction might be. A short-term saving on such expenditure could lead to a very long-term increase in the cost of funding unemployment benefits and policing a society that feels let down.

Steve Wells – A  Realigning of Resources

Exponential technology development represents a possibility explosion; the possibility to create new industries, new products and services, new business models, and new occupations. Rather than displacing more jobs than it creates, it will herald the advent of a new world, one that presents the opportunity for us to commit to a very human future.

Can automation really replace—as some have predicted—around a half of existing jobs? If we consider that—even within the challenging context of the disruptive nature of exponential technology development—the very same technologies will support the creation of new businesses. They will provide scope for innovative business models to bring products and services to market for a customer base who will be working in jobs that do not exist yet.

I expect to see functions such as data analysts (leveraging big data and artificial intelligence), specialized sales representatives (commercializing and articulating new product and service propositions), and senior managers and leaders (to steer companies through the upcoming change and disruption) become critically important over the coming years.

I also expect to see an increasing number of occupations comprised of skills that are not yet considered crucial to the job today. Social skills—such as persuasion, emotional intelligence, and teaching others—will be in higher demand across industries than narrow technical skills, such as programming or equipment operation and control.

This transition is not without challenges. But, with a broader re-assessment of the partnership between business, government, and society, maybe we are entering a once in a millennium opportunity to redefine society’s relationship with employment. Maybe part of what we seek is the discovery of our humanity; to find time for leisure, self-improvement, spiritualty, or being with loved ones. Maybe it is time for a very human future.

Alexandra Whittington – The Social Safety Net

I take the view that machines will manufacture and distribute everything with almost no humans involved, and new businesses will be fully automated from the start. By 2040, up to 80-90% of jobs could be gone, and not be replaced with new opportunities. This only really works for humanity under the universal basic income (UBI) scenario that Elon Musk and others have advocated for.

In 20 years, automation may have created a society where jobs aren’t available or not being created at the scale necessary to employ the large numbers of people automated out of a job. Only the most highly skilled human workers would be needed, creating a huge underclass of people with no job, no prospects, and no income.

One way to pay for this program would be to fine companies for each job they automate, or to tax the use of robotic workers. In manufacturing, a form of community profit sharing could be adopted. Companies might be expected to supplement the living standards of the local communities in which they are located by providing for the basic needs of the residents and former employees. Manufacturers might go from being a profit focused business to providing a social service—giving away free products to local citizens or actual cash payments to municipalities in place of creating jobs. Where the community might not be able to use the product, then it could be sold by the manufacturer and the revenues donated to the community.

It might be reasonable to ask that any product being produced by automated labor would have a ratio of free giveaways to sales, following the innovative business models of firms like Toms Shoes, where for each pair of shoes sold, a free pair is provided to people in underprivileged communities. I believe that under this scenario companies could become very creative and proactive in coming up with ways to give back, including strategies to supplement UBI, if they wish to take full advantage of automation.

• How do we start to prepare society for a future where the outlook for jobs is so uncertain?
• How can we mobilize individuals to take greater responsibility for their continual learning and future job opportunities?
• How can we test and debate radical new ideas around Universal Basic Incomes, automation taxes, and community profit sharing?

This article is excerpted from A Very Human Future – Enriching Humanity in a Digitized World. You can order the book here.

Image: https://pixabay.com/images/id-4330185/ by geralt

By Steve Wells and Rohit Talwar

How might businesses drive a step change in online sales performance in the coming years?

Many businesses no longer need convincing that online sales are becoming ever-more important. They see the potential to reach bigger audiences and generate massive uplifts in sales—if we get it right. Even those who have been selling online for some time are beginning to understand the true scale of the opportunity and acknowledge the potential to drive exponential sales growth.

But it all seems so complex: How can we succeed online when it appears to be changing by the day? What do we need to do tomorrow? How much should we be spending? What if we get it wrong? Everyone wants answers to the same questions. Here we explore practical tactics for those that sense the opportunity and are willing to invest some time and money in pursuit of the prize.

Some have pursued relatively modest goals and been pleasantly surprised at how much a good online presence can impact their revenues. The most spectacular winners to date in the online world have embraced the opportunity and developed a “digital mindset” which they continue to evolve in line with new thinking about how to use the internet as a sales channel. As a result, they are delivering exponential growth in online performance.

Others are being more ambitious still, and starting with the goal of developing businesses that can create a billion or more customers using the power of the mobile internet. So, whatever our ambition, how do we get started or take the next few steps? Below we have outlined four elements to focus on in your next steps plan.

1. Learning What Works

You can’t delegate your own mindset change. You have to invest time reading and networking to learn about what others are doing online. Don’t be afraid to ask basic questions—they can provide very powerful insights. Our top three areas to focus on when talking to others would be:

• Results – Establish that there’s value to be gained. What proportion of revenues comes from online sales? How has that changed since they started selling online? How long did it take to generate meaningful online sales? How much comes from mobile? How does profitability compare to other sales approaches? What have they spent on creating and running their online offering? What are their online targets going forward?
• Actions – Understand how they got here. How did they start? What are they doing today? What tactics worked and which were abandoned? What external support did they use? How did/do they raise awareness and drive people to their site? What does their “conversion process” look like to take site visitors from interest to purchase? What would they do differently if starting again? What do the plan to do next?
• Management – How do they manage online sales? Who’s in charge? What resources do they have involved? How do they deal with conflicts between the online and physical sales teams? How’s that changed over time? What’s next?

2.  Think Mobile

People’s interactions with the online world are increasingly happening via their mobiles and the trend is likely to continue. Whether they are using apps or accessing the internet, they will be doing it on their mobile devices and the functionality will get ever smarter. If you know where things are likely to be going, you can bear that in mind when developing your online offering. So, many now start by designing their website and app to work on mobile devices first and then adapt it for the bigger screen.

We can expect connectivity speeds to get faster, meaning we can share more video information about our products and services. Devices and apps are also likely to get more intelligent—smart software will increasingly block unwanted ads and calls and screen incoming callers on behalf of the user. What are the critical messages that you want to convey to get you past these electronic guardians?

3. From Research to Action

The key to success is willingness to experiment and try what’s worked for others. This means putting people on the web team that like learning, testing, and refining ideas and who don’t mind dumping stuff that isn’t delivering. If step change is your goal, then make sure you’ve researched companies who’ve done that. Then create a plan of actions that you want to try—from promotions and banner exchanges, to social media campaigns, and low-cost sponsorships. Have a 3 to 6 month schedule of what you want to try each week or month, monitor it, measure it, learn from it, and refine the strategy. Be willing to adapt plans in the face of evidence from the actions you are taking.

Keep looking out for new ideas and encourage the whole business to do the same and generate their own ideas. The key here is being honest about what you are worried about in relation to your online presence, e.g. damaging your reputation, irritating customers who see a lower price than the one they paid, or giving too much away to your competition. The more you share of these concerns, the more your team can think about how to address them when seeking out and generating ideas.

4. Finding Customers – Look for What’s Hiding in Plain Sight

Look for opportunities to present yourself where potential customers are already. Airports, train stations, shopping centers, sporting events, festivals, markets, and other live events all have ready-made audiences. Taking pop-up stalls in these venues gives you an opportunity to try out a different way of meeting and engaging with potential customers and then encouraging them to provide you with their details so you can continue the relationship. I may love the locally made chocolates that I tasted from a pop-up stall in Cambridge station; connecting online means I can keep buying the goodies even if I never see the stall again.

There are now countless examples of players who have gone from nothing to exponential growth by capturing customer interest in the online world. There are also many who’ve evolved from a physical presence to a purely online operation because of the efficiencies it can bring. Others have failed spectacularly to crack the online opportunity.

The keys to success lie in learning continuously, asking the right questions, recognizing how the technology is evolving, planning carefully, experimenting constantly, and involving the right people. Success also requires us to be clear on our goals and concerns, and then adopting an iterative, experimental, and constantly evolving approach to what we actually do online and to how we go about attracting potential customers.

• What are the key priorities for the next evolution of your online presence?
• What tactics are you adopting in both the physical and online environment to drive people to your site?
• How are you involving staff in the process of generating ideas for the evolution of your site?

This article is excerpted from The Future Reinvented – Reimagining Life, Society, and Business. You can order the book here.

image:https://pixabay.com/images/id-4354457/ by geralt

By Rohit Talwar and Alexandra Whittington

How might a deep focus on customer-centricity revolutionize the automotive sector?

The automotive industry is undergoing a period of rapid and radical transformation fueled by a range of technological innovations, digital advancements, and wave after wave of new entrants and alternative business models; as a result, the entire sector is seeing major disruption. Here we highlight the key drivers of change for the sector and explore possible outcomes in such a rapidly evolving market.

Rise of the Sharing Economy

The sharing economy is transforming transportation in several unexpected ways. Uber, probably the best-known example, has its own unique ecosystem of passengers, drivers, and car owners. It has shown itself to be revolutionary enough to disrupt the taxicab system worldwide. Uber brought about this disruption without owning a single vehicle or—until recently—employing a single driver; instead, it has achieved a valuation of around US$68 billion through the magic of smart phones.

The Uber story goes to show that a car is no longer just a thing to drive, but a service that meets the needs of consumers who’ve been priced out of ownership or prefer on-demand use of transportation. Today, a car is a potential source of passive income for its owner, and a flexible asset for the start-up companies that would like to be middlemen in the continuum from car ownership through to car ride services based on “usership.” Where we once talked of selling or leasing to an individual, cars in a shared ownership scheme typically have anywhere from 6 to 40 joint owners or lessees.

Sharing models reduce the cost of ownership for the individual but can dramatically increase the level of usage, the rate of wear and tear, and the servicing costs for the warranty provider. Over time we might see smart data services emerge that draw on the mass of sensor data coming from the car to profile each individual’s usage of the vehicle and charge them accordingly. Where the vehicle is provided on a shared lease basis to the user pool, then the costs to the fleet owner can rise because of this potentially dramatic increase in usage rates of each car.

Smart Device Revolution

There are a number of ways innovative new companies are hoping to help the automotive sector adapt to the needs of the emerging transport consumer. Business models are embracing at least three consumer priorities when it comes to using a car: driving, owning, and sharing. And it just so happens that these three priorities are best coordinated via smartphone, a mega-trend transforming business and industry across the globe.

In India, for example, where an on-demand car economy is thriving, Zoomcar, Myles, and Revv are three notable start-ups hoping to change the car driving ecosystem. These rental fleets seek privately-owned cars to place in service for customers to rent while the owners are not using them. So rather than pay fares to ride in someone else’s vehicle (as with Uber), Zoomcar lets drivers rent and operate someone else’s personal car, allowing Zoomcar to keep its inventory low and maximize profits.

Start-ups like these may be involved in the loan contracts for independent owners to purchase new cars specifically for the purpose of leasing them out for extra income. As a new business model, sharing means multi-stakeholder automobile purchases enter the mainstream. The decision base for consumers’ transportation options is growing wider. For example, consumers may opt for larger cargo space or bigger passenger seating areas depending on what they can earn from leasing different types of vehicles. Their purchase considerations may involve not only their own needs, but also the potential to profit from the product they are purchasing.

The model, if proven, could start to create interesting alternative options for more traditional fleet owners and car rental firms. A sufficiently large pool size should ensure availability on demand, reduce capital investment, and lower ownership costs as a result of transferring these to the car owners. More creative schemes might include shared or fractional ownership of private vehicles in return for a guaranteed level of access. Equally it could generate additional potential revenues for fleet owners and individual drivers if their vehicles could be rented out when not in use.

Differentiated Automotive – Mobilize the Fleet

The question arises: Why be limited to just one type of automobile? There is a growing on-demand car audience being served through the “car club subscription” service model of ownership offered by the likes of YoYo and Clutch. Rather than purchase, or lease, a single car, this type of program entitles the member to the use of a car, or fleet of cars, as needed. In this scenario, the driver could choose an SUV for shopping and a sports car for weekend road trips. There is little need to commit to a single car if you do not want to. With limited access for anyone not living in large urban areas, partial or shared car ownership may become a symbol of cosmopolitan living, like a subway pass or bus card.

For those who wish to continue the traditional car-owning experience, the choices for shopping and finance will be as varied as the design and engine options available to them. Automotive e-commerce, like car design itself, is experiencing a renaissance, with players like Roadster and Carvana re-defining the car-buying experience online. These are deal-oriented websites selling cars, supported by brick-and-mortar outlets, but with a mission to put to rest the imagery of wheeling and dealing with salesmen on car lots.

The Connected Car

As we see an increasing level of electronic functionality in the “always on” vehicle, so the nature of the business model changes—with the potential for new revenue streams to emerge. The bigger the installed base of connected car owners we serve, the broader the range of services we can offer. Opportunities range from securing discounts through aggregated buying of fuel, to directing the driver to a specific repair garage when the sensors detect the tires or brakes need replacing. Aggregating the data collected from sensor-rich vehicles will also enable the creation of a range of new information products that might become a valuable revenue stream over time.

The advent of thin film display screens will allow us to charge advertisers to display dynamically updated promotions on the external surfaces of the car. The advertisements might change regularly as we drive through neighborhoods with varying citizen demographics and wealth profiles. A number of players could act as the electronic service provider here, taking a range of income streams from the various activities.

Consumer Trends

A growing number of automotive sector start-ups recognize that the modern car consumer is educated, comparison-oriented, savvy, and knows what they want. While it may sound like a luxury service, the future of car buying online is expected to be highly practical, and designed for the time-poor car buyer. The new automotive e-commerce looks a lot more like Amazon than personal shopping in a department store; Carvana, for instance, has used glass storage towers of cars to cultivate its image of selling cars by “vending machine.” The new online car vending approach seeks to replicate a shopping app: Select, purchase, and receive your new car from a warehouse in a simple, fast, and seamless experience.

With all these emerging options, vehicle financiers need to think about how the flows of money through the system are changing and how to make the most of opportunities available to potential customers. They will need to decide whether to take on the risks that come with acknowledging they have little influence over what consumers decide to buy, and no control over what the consumers actually do with the final product.

The sharing economy is all about decentralization, something that is made more and more feasible as smart phones, for example, assist consumers in obtaining their precise wants and needs. It’s time to recognize that customers are taking back power that used to belong to the banks, the manufacturers, and the dealers, and they’re using the technologies in the palm of their hand to do it.

• What strategies might traditional companies adopt in order to win in the face of the wave of disruptive changes on the horizon?
• As more accessible exponential technologies democratize driving, owning, and sharing, what broader impacts could these changes have on society?
• What new business models might emerge around the use and ownership of vehicles?

This article is excerpted from The Future Reinvented – Reimagining Life, Society, and Business. You can order the book here.

Image:https://pixabay.com/images/id-3003633/ by Spirit111

By Steve Wells, Rohit Talwar, and Alexandra Whittington

Over the next five years, organisations in every industry will experience change on an unprecedented scale as people, digital devices, smart technologies, and an ever-expanding network come together to transform commerce, work, education, healthcare, recreation, and more. A whole new range of possibilities emerges when we can engage with literally every device and build intelligence and connectivity into physical objects such as office furniture and clothing. The path to 2025 will spawn new customer-centric businesses, enable entire new industries and reinvent existing ones, challenge us to adapt and evolve, and facilitate greater access, equity, and inclusion across every aspect of society – this is the potential of the Edge.

We define the Edge as the new experiences being enabled by Edge technologies for customers, employees, students, patients, and any users of network services. Edge technologies allow the processing of data by devices at the Edge of networks, which is where users and devices are. It is where things connect to the network, whether they are wired or wireless. The Edge is where actions take place. Over time, these actions at the Edge will become smarter.

Smart meets digital at the Edge – smart conference rooms, smart assembly lines, smart menu ordering, smart stadiums, and a range of technology-enabled smart experiences. The opportunity at the Edge is driven by many things, including smart applications powered by artificial intelligence (AI) and machine learning (ML), mobile devices, Internet of Things (IoT) technologies, data analysis, next-generation Wi-Fi, 5G communications, and “Edge-to-cloud computing.”

The new Edge network combines AI, ML, and automation to continuously learn, predict, and adapt to changes, needs, and threats in real time. The new Edge network utilizes technologies and software to make sense of the resulting insights, enabling businesses to act and respond, optimizing the experience for the customer or user wherever they are.

Pushing intelligence out to the Edge will drive change in the design of our products, services, processes, and organizations, and transform how decisions get made – giving greater autonomy to the devices at the Edge.

Edge-based strategies are driving five critical shifts shaping the future of business and work over the next five years:

USER EMPOWERMENT – The technologies are enabling a fundamental redesign of the user experience – be they customer, student, patient, or employee – giving users the tools to define what they want, how they want it, and even how they want to pay for it.

TRANSFORMATIONAL LEADERSHIP – The scalability and rapid capability enhancements of exponentially advancing technologies such as AI, ML, IoT, and cloud computing are enabling leaders to pursue and deliver experiments to drive 2x to 10x greater improvements across their businesses.

THE PURSUIT OF DIGITAL INNOVATION AND EXCELLENCE – The increasingly central role of digital technologies demands that we raise digital literacy across the organization and prioritize the rapid evolution of our digital capability to accelerate the adoption of a digital mindset and speed up the creation of digitally based products and services based on insights generated from data collected.

EMBRACING AND EMBEDDING SMART – The Edge is helping organizations embrace the true power of smart devices to deliver mass customization and deep personalization of a range of user experiences. Rapid advancements in AI and ML are enabling the establishment of smart spaces and creating the opportunity for smart personalization, adaptation, and continuous learning in the applications offered to users.

EMERGENCE OF NEW BUSINESSES AND INDUSTRY SECTORS AT THE EDGE – The focus on solutions tailored to customer needs is driving opportunities from the creation of new businesses to the birth of new trillion-dollar industry sectors.

A CALL TO ACTION

Capturing the Edge opportunity requires radical shifts in strategic thinking, an investment in developing deep digital experiences, experimentation with new business and revenue models, and evolution of the IT function. This change needs to be owned and driven from the C-suite. Such initiatives clearly require a vision, defined goals, and a robust delivery plan. However, before an organization can start to articulate these, most need to go through a preparatory phase to ensure they are ready to embark on a transformation of this scale. Seven key enablers of that preparatory process are identified:

LEADERSHIP AWARENESS – The starting point is rapid immersion in the top team to ensure they understand the opportunity, are aware of the associated risks, know what it takes to succeed, can prioritize what’s to be done, and maintain a clear dialogue with all stakeholders.

OPEN AND FLEXIBLE TECHNOLOGY OPTIONS – Ensuring the adoption of open, agile, and secure technology choices that allow teams to pursue future options that may not have been considered initially.

IT ALIGNMENT – Making sure the IT function can lead and deliver the journey to the Edge and has the capabilities to manage the demands, security challenges, and risks of an Edge-based technology ecosystem.

MINDSET AND DIGITAL LITERACY – Driving organization-wide awareness of the shifts taking place in the marketplace and the new business paradigms being pursued, and building high levels of digital literacy and capability to deliver on the opportunity.

USER DIALOGUE – Understanding expectations and concerns to ensure solutions genuinely meet the requirements of their intended users.

BUSINESS CASE AND INVESTMENT FUNDING – The true potential of the opportunity at the Edge will only reveal itself once solutions are in the field – the business case and investment funding strategy need to evolve in line with the evidence from the projects delivered.

FOCUSED PROJECT APPROACH – The pilot projects and experiments undertaken should be meaningful, should have clear goals, leadership, and dedicated resources, and should be delivered rapidly to ensure business focus, with rapid sharing of lessons learned to drive subsequent projects.

The opportunity at the Edge represents a new way of conceiving business – designing from the outside in and putting the organization’s focus on what happens at the Edge to maximize value for customers and employees, while also driving operational efficiency. Although it may seem that the concept is in its infancy, the nature of competition and the exponential rate of advancement in the underlying technologies mean that the pace of adoption will accelerate. This will lead in turn to transformational shifts in the experiences created and the business and revenue models adopted across every sector. For the C-suite, the call to action is clear. The only question is: how quickly can you respond to start building the future?

This article is excerpted from Opportunity at the Edge – Change, Challenge, and Transformation on the Path to 2025. Read the free eBook here.

Image: https://pixabay.com/images/id-1709208/ by Geralt