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By Steve Wells, Rohit Talwar, and Alexandra Whittington

Are robot taxes a plausible solution for the upcoming wave of technological unemployment?

When you know a storm is coming, you have a sense of its likely form, speed, direction, potential impact, and possible duration. Armed with that knowledge you can then take in provisions, batten down the hatches, and go to a place of safety. The challenge takes on a wholly different magnitude when that storm is in the form of artificial intelligence (AI) software that might power smart or even superintelligent machines and robots which could in turn impact every aspect of life on the planet. So, what’s really going on here and why are we talking about robot taxes as a solution to the potential rise in long-term unemployment? Here we explore ten key questions to help the reader get their head around the whole subject of taxing the “bots.”

1. What’s driving the debate?

The big issue here is the likely extent to which automation will reshape the industrial landscape, change the nature of work as we know it, and drive up the number of people facing permanent unemployment. On the one hand, we know smart technologies are developing at an exponential rate. Individually and when combined, they will have an impact from automated warehouses and autonomous cars, to computerized drug discovery and the diagnosis of Alzheimer’s disease ten years before the symptoms show—it’s already happening. However, and crucially, we don’t know how far and how fast AI and these other disruptive technologies will spread. Furthermore, we don’t know how many jobs they will take out; we don’t know how society will respond (e.g. the Uber backlash); we don’t know the extent to which firms will retain people when they automate; we don’t know how fast the new sectors will grow; and we don’t know how many new jobs they will create. In practice we are pretty clueless—but that’s understandable at this stage in the development of such a powerful technology.

2. So why act now?

What we do know is that jobs are already going, more will follow, and it would be a reckless government and a careless citizenry that didn’t think about how to address the challenges. Countries already know that to compete in the emerging global economy, we need to change the nature and focus of education at all levels and prepare adults for roles in the new sectors—which will mainly be higher skilled as the “bots” will most likely do the rest. So, it’s reasonable to at least explore the scenario of rising technological unemployment over the next decade. Realistically, in the United Kingdom (UK) for example, this means we’d need to fund either a higher total unemployment benefit bill or the provision of some form of guaranteed basic income and/ or guaranteed basic services. In this scenario, fewer people working means they are likely to be paying less overall income tax, which means we must fund the revenue shortfall somehow—that’s assuming we want to maintain the current level of public service provision whilst also covering the higher unemployment costs.

3. How are governments responding?

Let’s look at the UK as an example of how governments are wrestling with the issue—the range of responses is not untypical of how different nations are approaching it. The ruling Conservative Party is loath to acknowledge the possibility of rising unemployment due to automation. The hope is that encouragement of free markets and lower corporate tax rates will drive business growth and employment. They believe that unemployment costs will be met through revenues from corporate and individual taxes coupled with Valued Added Tax (VAT). In contrast, rising numbers of young members in the opposition Labour Party are concerned about the impact on their future—spurred on by already high levels of youth and graduate unemployment. They are keen to ensure the UK doesn’t go into the kind of decline in youth opportunity that we saw with Greece and Spain.

In response, and acknowledging the fundamental changes taking place in the industrial economy, Labour has been mooting the idea of “robot taxes” to finance the cost of adult retraining, education trans- formation, investment in new technology sectors, and unemployment provisions. The argument is that robots should be taxed because they will be considered as something that creates value for the owner, like property, and if firms are cutting headcounts, then they are likely to be making higher profits. Furthermore, the belief is that those who will receive the benefits will spend that money with the firms who paid the robot taxes.

4. What would robot taxes pay for?

Clearly, the primary purpose should be to address the societal consequences of job automation. So, the most obvious application would be to fund unemployment benefits or guaranteed incomes and services. However, it is difficult to believe that any tax raised could be permanently and transparently allocated by government for one specific use or another. In the UK for example, when one looks across the range of taxes now, is there evidence to show that fuel duty is ploughed back into highway maintenance as originally envisaged?

Alongside unemployment costs, there is a strong argument that a significant proportion of the revenue from robot taxes should be channeled directly into public education. This would create a positive role for robots in society, which would be to pay for public schools and universities. The hope is that this would prevent a backlash from the people whose jobs are lost to automation. Ideally, it would also generate enough money to revamp an outdated education system into a forward looking one that teaches the knowledge and skills which will be in demand in 2030 and beyond, when most jobs as we now know them may have been absorbed by robots and algorithms.

A robot tax could help pay for a new approach to education which develops the whole person, not just the future worker. These would include life skills (e.g. cooking, health, and household management), interpersonal skills (listening, leadership, and writing), and self-awareness (mindfulness meditation and mental health strategies). The underlying principle is that we should use the value of automation to benefit society and prevent future problems.

5. What is the likelihood of governments around the world introducing a robot tax on companies that replace humans with smart machines?

The South Korean government has reduced tax allowances for those investing in job-replacing automation, which effectively amounts to a new robot tax for those previously claiming the allowance. Several governments have started to think about the spending side of the equation—the human consequences of automation—exploring everything from new approaches to adult education to encouraging the creation of start-ups. Several, such as Canada, Finland, and Germany, have also been experimenting with different forms of guaranteed or universal basic income (UBI).

These are relatively small experiments; the intention is to learn about them before they are required. The experiments are looking at different funding models, whether any access conditions should be applied, and the impact on mental health, domestic violence, crime, and community cohesion. Such experimentation seems eminently sensible as an input to any nation’s debate on the topic.

At a broader tax policy level, across the world, rapid automation must be seen as one very important driver of change to nations’ tax collection regimes. Clearly the public spending policy decisions of these governments will also have an impact. Hence it becomes critical to explore different possible scenarios to understand the likely spending requirements and revenues under a range of different conditions. Governments can then examine both their spending priorities and possible revenue instruments. As such, it may be that the impact  of automation plays a much bigger role in driving future decisions around taxation policy, broadening the debate beyond the deployment and taxation of robots.

6. Who might lead the way and when might it happen?

It seems unlikely that any government would introduce these kinds of measures within the next two to five years, but by 2030 the possible pace of change means they could well be commonplace in many industrial nations. Countries that are embracing automation and the digital era in all its forms such as South Korea, Japan, and Singapore might be among the first to implement some form of explicit automation taxation mechanism. Whilst China is saying little right now, it has the capacity to enact policy rapidly should the need arise.

The overt and hidden political power of the Indian super-corporates means it is likely to be a very late adopter. In Europe, nations such as Estonia, Finland, Sweden, Denmark, Iceland, and Germany are likely to be among the first to revamp their tax systems in this way. Whilst many in Silicon Valley argue in favor of robot taxes, the US is likely to face strong resistance to such changes. Indeed, it could well be among the last to go down this route and might conceivably not do so at all without a fundamental change in its governance and electoral systems.

7. How might such taxes work in practice?

The going in point here should be to evolve a more flexible approach to creating government income to fund future public services. The basis of corporate taxation could become even more complex with systems applying AI to large multi-variable data sets to establish a tax liability based on the sector, revenues/profits per employee, the number of people employed, and geographic location. The algorithms could also take account of factors such as expenditure on training and retraining current and former employees, the support given by firms to start-ups, the level of employment created further down the value chain, and the amount of tax paid by the firm’s employees.

Perhaps evaluation of a business’s broader impact on society could also be factored into determining the level of taxation applied to its profits. Such factors might include the actual level of human employment, local and national social responsibility, and environmental impact—so that the tax paid is based on the net outcomes for a coun- try of a business’s operation across a range of different domains.

Some measure of net added value could also be considered. For example, a firm may train its employees so well that they go on to higher paying jobs elsewhere or to generate employment and tax revenues by starting their own business. How might their taxation be assessed relative to a firm who invests little in people development and whose staff cannot find jobs elsewhere when made redundant? In the UK, the Pay as You Earn (PAYE) system is a government mechanism by which employers collect tax from employees and transfer it to the tax authorities. This could be used to calculate credits for application against a business’s corporation tax liability.

An interesting scenario to explore would be the possibility that AI could create the opportunity for governments to recover public spending commitments pro-rata from every tax payer and corporation in the country, purely based on individual incomes or business revenues. In the worst-case scenario, this could mean firms posting a loss because they failed to make a profit after paying their fair share for running the country. The key here is modeling a variety  of different approaches to see which produces the fairest and most transparent system. This may well evolve over time as the controlling AI algorithm learns about what second and third order behaviors it engenders in firms as they try and reduce their tax bill.

There are, however, precedents we can learn from. For example, the UK pharmaceutical industry has paid a levy based on revenue or capital employed on its supplies to the National Health Service (NHS) with a series of allowable and dis-allowable expenses. This approach has been designed as a mechanism to control profits on medicine supplies to the NHS while seeking to reward investment in R&D.    A similar approach could be taken with companies and the level of automation they employ versus their investment in people.

8. What potential risks and drawbacks are there?

Whilst there will be supporters of the idea, this is going to be hugely controversial and unpopular with a lot of politicians, businesses, commentators, accountancy firms, certain news media, and many economists. It is already being cast as unbridled socialism, communism, or Marxism by many proponents of low taxes and free markets. However, at present, no viable alternatives are being put on the table.

At the operational level, it could be costly and complex to implement, and opponents will look for any shortcomings to cast  it off as a failure. The prevailing corporate mind-set is often to base multinational operations in lower tax markets, so competition for the hosting of multinational organizations could intensify without global agreements. Inevitably, many will look for ways to minimize their tax payments and a range of advisory services and schemes will spring up to help firms do so. Failure to implement a viable system or a workable alternative could have disastrous consequences for governments, leading to potential reductions in public service provision and even the failure of some economies.

9. What are the potential benefits?

A solution will be required if unemployment does rise and government revenues decline because of lower personal tax and VAT/sales tax income. Whilst robot taxes may not be the ultimate answer, and better solutions might emerge, it is the only clear policy idea that is even being mooted today for what is an increasingly pressing societal issue. Ultimately, the notion of taxation based on automation could prove to be a catalyst for more socially responsible “carrot and stick” approaches to corporate tax.

Maybe the application of increasingly sophisticated AI could be the critical enabling technology to providing a fair and transparent system with no potential for tax avoidance or manipulation by individual firms. Indeed, AI could one day give us even smarter tax systems that none of us can even imagine today. Perhaps the fully automated corporation or decentralized autonomous organization (DAO) of the future may see its prime directive to serve humanity as a whole and maximize its contribution to society.

10. How do we get started?

We don’t know yet what robot taxes might look like in practice because no one has really tried to create one. Thus, the first stage must be  to run some serious computer simulations of different scenarios for the potential pace of automation and the impacts on employment in different countries around the world. These could be used as input to the development of economic models to explore the funding requirements of different public service strategies and how they might be met. If there’s a shortfall between what’s required and what could be collected under the current taxation regime, then the potential for different robot tax models (and any alternatives) could be evaluated and the likely implications assessed.

Artificial intelligence is creating the tools that are driving the pace of automation and the prospect of increased unemployment. Equally, AI tools could also be used to design and develop new approaches to taxation that could help us address the societal consequences of technological disruption and ensure a very human future for all.

• What are the critical questions and concerns we need to explore in the design of robot tax experiments?
• If companies could allocate the money collected from robot taxes, what might be the most popular options for how it is spent and why?
• What alternative mechanisms to robot taxes might we adopt to provide and fund public services and social protection?

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

Image: https://pixabay.com/images/id-1254090/ by kalhh

By Rohit Talwar and Alexandra Whittington

How can law firms take advantage of the new growth opportunities presented by developments in blockchain technology and digital currencies?

The future of the legal industry is being reshaped by a number of rapidly advancing technologies and the disruptive ideas they enable. Today’s lawyers are being advised to learn to code, develop an artificial intelligence (AI) application, and outsource legal discovery tasks to machines.

One of the many new technological drivers impacting law firms is the secure information exchange/transaction ledger platform known as a blockchain. Opinions about its potential impact are divided—some see it as the basis for the reinvention of economies and global governance, while others simply see it as means of secure and incorruptible information exchange between counterparties.

This cloud-based distributed ledger technology provides a source of irrefutable record of every transaction. In legal it is enabling fully automated self-executing “smart” contracts, and has the potential to help attorneys provide new services and create new value for clients and law firms. Blockchain is known as the structure underlying Bitcoin and other digital currencies, but its applications in the legal sector are still evolving. Here we provide an overview of the technology, highlight example applications and case studies, and present a possible timeline of future developments over the next decade or so.

Overview: Blockchain and Bitcoin

Blockchain has gained notoriety lately as a potential solution to an outdated and burdensome system for managing financial transactions between counterparties. Today most financial transactions between counterparties are settled via financial intermediaries, which add time and cost to the settlement process.

Blockchain offers a distributed ledger model whereby the parties settle directly with each other, the transactions are recorded, secure, and immutable, and the counterparty identities remain anonymous. The goal is to use a “trustless” mechanism to enable a simplified and trustworthy financial ecosystem. However, in the process, these digital peer-to-peer networks also challenge the authority of institutions (banks, regulators, and governments) and are thus creating disruption.

According to its advocates, the decentralized nature of blockchain and Bitcoin will cause much-needed disruption, with reverberations far beyond the financial realm. There is an element of social revolution in blockchain, thus it is often portrayed as a conduit for challenging the status quo. Though Bitcoin, a digital currency, is an explicitly financial innovation (i.e. for payments, transfer of funds) blockchain is far less specific. Blockchain serves a critical role in the administration of Bitcoin, and there are similar platforms in place for other digital currencies.

Blockchains can also be used to complete a range of other tasks, and track the movement, transfer, and ownership of all sorts of things besides money. Example applications include luxury goods, education credits, property titles, and patents, to name a few. Blockchain is structured like a traditional accounting tool: at its core is a ledger that tracks deposits in and payments out and maintains a running balance. However, its uses go far beyond counting coins.

Lest we assume blockchain and Bitcoin are solely the tools of the far-left, libertarians, anarchists, and socialists among us, this technology has captured the attention of global business and industry to the tune of millions of dollars. Among banks alone, one source projects spending on blockchain solutions to grow from over US$200 million in 2017, and US$300 million in 2018, to US$400 million in 2019.5 Perhaps ironically, a great wave of enthusiasm for blockchain now emanates from the business establishment, including stalwarts like banking, finance, real estate, and law.

Bitcoin is by far the leading digital currency at present. At the time of writing, its valuation had reached US$18,000—giving it a market capitalization of around US$305 billion. The issue here is that few would use their precious coins to buy goods and services if they expected the value of the coin—and hence the effective cost of the purchase—to increase by 50% within a few weeks.

Applications to Law Firms

While the basic metaphor for blockchain is an automated checkbook register that instantly reconciles transactions, there are several other concepts inherent to blockchain, which are ideally suited for applications in law firms. Current legal industry activity around blockchain ranges from the simple—payment for services rendered, verification of contracts, representing companies conducting business on the blockchain—through to the highly complex, such as formulation of an entirely new legal system altogether.

Clearly, a supranational legal system would usurp local or national laws to create a globally agreed upon set of codes that govern rights during a dispute. Examples like this demonstrate the potential scale of blockchain’s legal sector applications. In terms of contracts and payments, though, the firms now adopting blockchain are attracted to its practicality: It reduces the resources needed to complete day-to-day operations. For example, Goldman Sachs estimates that $US11 to $US12 billion per year could be saved with blockchain-based clearing and settlement of cash securities, with $US2 to $US4 billion yearly savings from moving real estate titles to distributed ledgers.

A growing number of industry examples demonstrate the diversity of applications of blockchain and Bitcoin to legal services:

• International law firm Steptoe & Johnson helps clients in all industries manage application of the Blockchain in their businesses, and accepts Bitcoin as payment for fees.
• King & Wood Mallesons (headquartered in Hong Kong) has several dozen lawyers who have a focus on blockchain, including smart contracts.
• Perkins Coie LLP partner Dax Hansen (US) launched the first blockchain legal industry practice in 2013, which has grown to over 40 lawyers focused on blockchain technology, digital currencies, and distributed applications of all types.
• Selachii (UK) is implementing self-executing smart contracts on blockchain, starting with wills, title registries, and shareholder agreements.
• Allens (Australia) wrote a report suggesting that the future of the legal business model, which profits from an absence of trust between organizations, is imperiled by the rise of blockchain technology.

Outside of law firms themselves, the start-up ecosystem has many examples of services geared toward marrying procedural business practices with blockchain:

• Juro uses blockchain technology to underpin the creation and signing of legal contracts.
• The Decentralized Arbitration and Mediation Network (DAMN) operates as a network of smart contracts on the Ethereum blockchain, creating an “opt-in justice system for commercial transactions” as a new form of cross-border dispute resolution.
• CommonAccord is creating global codes of legal transactions, automating legal documents such as master service agreements.
• DAO.LINK is an initiative which facilitates brick-and-mortar business interactions with blockchain-based organizations.

Timeline of Possible Future Blockchain Developments in Law

Based on the pace of developments to date, we see the following as a plausible expansion of the role of blockchain in the legal sector:

Next 18 months: ETA 2018-2019

• Growing use of smart contracts.
• Increasing acceptance of digital currencies as payment for legal services.
• Proliferation of consortiums to integrate blockchain into business practices across different sectors.
• Several blockchain start-ups acquired by large banks, law firms, and consulting firms.
• At least half of the top 200 global law firms working with clients interested in engaging in blockchain transactions.
• A number of case examples of asset owners fighting counterfeits and patent violations with blockchain.
• Multiple instances of real estate transactions, deeds, and new financial instruments being recorded on blockchains.

Next 3 years: ETA 2020-2021

• A proliferation of blockchain-based distributed autonomous organizations (DAOs) with no workers and no bosses, just algorithms.
• Numerous examples of merger and acquisition transactions conducted on “auto pilot” using blockchain and AI.
• Elimination of some jobs and roles (banker, advisor, lawyer).
• Merging of AI and blockchain; robolawyers on blockchain.

Next 5 years: ETA 2023-2028

• Deployment of a DAMN – a global supranational legal system for international dispute resolution.
• Automation of arbitration, dispute resolution, and various legal and banking processes—eliminating more roles in law firms and banks.
• Creation of new professional roles to deal with the legal ramifications of the spread of blockchain.

5-10 years: ETA 2028-2033

• The rise of Algocracy: Law is code, code is law.
• The first distributed autonomous societies (DAS) with automation of services, justice, rights, and laws.

Blockchain and cryptocurrency gained unprecedented ground in 2017. The central bank of China is piloting a blockchain-based cryptocurrency, possibly a very loud signal about the rising status of the technology which will legitimize its use.16 Another indicator comes in the form of headlines screaming about Bitcoin’s price trends, earning investors millions and suggesting that cryptocurrencies are now firmly in the public consciousness.

As futurists, we expect that for every big wave of change, there are dozens or hundreds of small ripples; the revolutionary nature of Bitcoin and blockchain means it will disrupt businesses of all kinds. Because it involves money, contracts, and ownership, this is a special consideration for lawyers and their firms.

Starting now, law firms owe it to their staffs and teams to begin a conversation about blockchain, Bitcoin, and other digital currencies. Information, in this case, is power—blockchain’s distributed disruption of banks, laws, and most traditional social institutions will generate new conflicts, anxieties, and tensions for which a legal remedy may be the only solution. It is a likely topic of future legal matters.

Keep in mind that the best way of describing blockchain is “distributed,” in other words, absent of central authority. A lot of the projects in the works seek to apply this thinking to society at large through DAS’, DAOs, and distributed legal systems. If a distributed mindset prevails, this will be of direct relevance to lawyers, judges, law enforcement, and anyone in occupations that rely on a centralized legal system.

Furthermore, the entire basic model of business conduct stands to be disrupted on the same scale as it was during the rise of the internet as a business tool. Blockchain, in combination with other technologies like artificial intelligence and cloud computing, is likely to lead to the transformation of the very basis of business, productivity, and possibly even money itself. By decentralizing the powers that be, blockchain seems set to be a high-tech disruption that will challenge law at every level and function.

• How might the legal sector react to the decentralization of power in society as a result of blockchain applications?
• What could be the role of law firms in a future where laws are coded?
• How might law firms capitalize on new opportunities and business models enabled by AI, blockchain, and cloud computing?

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

A version of this article was originally published in Legal Solutions by Thomson Reuters.

Images: https://pixabay.com/images/id-1138967/ by MichaelGaida

The following article contains an interview with Rohit Talwar

Global futurist Rohit Talwar set minds racing and Twitter buzzing with his captivating keynote speech at the January 2018 Learning Technologies Conference in London. We caught up with him to find out more about his thoughts on the emerging future and how we can prepare the learning and development (L&D) function for the immense opportunities that he believes lie ahead.

Please give us an overview of your recent keynote at Learning Technologies. 

The title of my keynote was Human Futures and Emerging Technologies—How Advances in Science and Technology Could Transform the Ways we Live, Work, and Learn. The presentation drew heavily on our recent book The Future Reinvented—Reimagining Life, Society, and Business and a new research program we have started on the future of education and learning. My central premise was that individuals, society, business, and governments will experience more change in the next decade than most people in work have experienced in their lifetimes.

I argued that the key determinant of whether we survive and thrive in this rapidly changing reality will be our capacity to let go of outdated worldviews, thoughts, beliefs, and assumptions and our ability to learn continuously about the technologies, ideas, and ways of thinking that are shaping the decade ahead. In short, there is a tremendous opportunity here for learning and development (L&D) to play a critical role in driving our organizations into the future—if we give ourselves permission to believe that’s possible.

I highlighted the transformations taking place in the world of work—powered by a combination of disruptive ideas and exponentially improving technologies such as artificial intelligence (AI), the Internet of Things (IoT), blockchain, and immersive tools like augmented reality (AR) and virtual reality (VR). I explored how they were already being deployed in an L&D context, and where their application could go over time.

I emphasized repeatedly my belief that the key challenge for organizations lies in ensuring human-centric differentiation in the face of successive waves of automation that could make us look more and more like our competitors. For learning and development this more central role for L&D sets up some clear priorities. The first is around envisioning, negotiating, and experimenting with L&D’s role in the new order. This in turn needs to be underpinned by regular horizon scanning to understand the forces and factors that could shape the future of our organization and L&D over the next one, three, and four to ten years plus. The goal is to use these future insights to develop scenarios of how our operating environment might play out and then craft strategies for the transformation of L&D’s role over the next three years to ensure we are flexible and forward thinking enough to respond to any emerging scenario.

Operationally, a more strategic role for L&D means introducing and pioneering new leadership models that break boundaries and challenge cherished orthodoxies which may be holding the organization back. While the future is not all about technology, we believe L&D should also be encouraging the use of gaming, simulation, interactive video, social media, AR, VR, and other technologies to help us make sense of the emerging, radically different environment and navigate a rapidly changing world. Given the centrality of technology to tomorrow’s business, L&D also has the imperative of helping the business think digital and evolve digital mindsets and new world literacy. This includes guiding the use of contextual micro-learning and productivity enhancement support for the digital workplace.

Given the pace of change L&D will also have to accelerate its own learning and experimentation with new approaches through internal and external learning collaborations. Finally, the modern workplace and continuous change have their casualties, and so we envisage a growing role in addressing the mental health challenge and providing lifelong learning support tools for displaced employees. While few in the audience disagreed with these new elements of L&D’s role, most felt it was some way off their current organizational positioning.

So how do you think L&D will be using AI in five years’ time? 

Our business systems will generate vast amounts of data about every aspect of an employee’s performance. This will drive smart contextual learning that provides input as required through a range of formats such as video instruction. Learning management systems will get smarter and integrate with our personal devices to develop a more holistic picture of what we are learning—although this could be seen as highly intrusive. Simulations and gaming experiences will get more sophisticated in the way they tailor the individual’s path through a learning experience. Finally, our personal devices will become our coach, therapist, and learning mentor—bringing in the tools and resources we need where and when we need them. This might range from coaching us on alternative negotiating tactics during a customer call to compiling briefing videos to watch on the way to a client meeting.

You published a series of blogs back in January about predictions for 2018 and beyond—one of them was the wonderfully titled Artificial Intelligence vs Genuine Stupidity. Tell us more about this. 

This was based on another one of our recent books Beyond Genuine Stupidity—Ensuring AI Serves Humanity. We believe that AI will have a transformative effect and we can anticipate the consequences from job losses to mental health issues and rising social anxiety. We argue that businesses and governments need to be thinking ahead and preparing for a range of possible scenarios—not just hoping the issue will go away.

Another of the posts was around the importance of stress management through health checks, mindfulness, sleep advice etc. Do you think tech can play a part here too? 

At one level, the technology can play a powerful preventative role with apps that monitor our health, undertake continuous monitoring of our vital signs, guide our meditations, and even teach us how to sleep. However, for many, the cause of their health issues, stress, and sleep loss might be that they are already spending too long behind—and in service of—the screen. Here it seems unlikely that more technology will be the most appropriate answer.

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-4314636/ by thedigitalartist

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By Steve Wells, Rohit Talwar, and Alexandra Whittington

How might exponential technologies help us design and deliver an enhanced city living experience?

Unlocking the Intelligence in Our Cities

Across the disciplines of architecture, engineering, and construction, three forces are coming together to drive the next waves of opportunity in the built environment—namely people, intelligent systems, and smart city concepts. At the core of the opportunity is the notion of creating truly livable environments for humanity, designed using intelligent tools, and delivered and managed through a range of technologies that will help us bring smart city visions to fruition.

Livable means creating cities that are human, vibrant, forward looking, functional, smart, and sustainable. The core tools underpinning their design will be those that can amplify human intelligence on a massive scale to interpret, predict, and create solutions based on the immense volumes of information about life in the city that is being gathered daily. Holding it all together will be highly interconnected smart environments where people, governments, and businesses can live and work together effectively using emerging and exponentially improving technologies such as big data, the Internet of Things (IoT), cloud computing, hyperconnectivity, artificial intelligence (AI), robots, drones, autonomous green vehicles, 3D/4D printing, smart materials, and renewable energy.

Aligning Stakeholder Goals and Visions

While the potential of smart cities is exciting, in practice it can be very hard to develop a clear, inclusive and universally supported future vision and strategy which delivers on everyone’s needs and leaves no one behind. Part of the challenge is that goals are not always aligned across the stakeholders and, at the same time, every sector is being disrupted and all our assumptions are being challenged. Hence, few can see what the needs of their business, locality, or family might be in the next 12-24 months let alone the five- to fifteen-year period over which a true smart city infrastructure might be rolled out. However, that’s exactly what we must do. City governments have to create inclusive processes that firstly inform citizens about the forces shaping the future and the possibilities and challenges on the horizon, and then engage the population in an open dialogue about the kind of future we want to create.

This is where architects, engineers, and construction specialists have an important role to play. They can help us explore and model what a livable city could mean to its people and contribute to the articulation of a clear vision. They can also offer insights on the ways in which the physical, digital, and human elements of a smart city infrastructure might be delivered and managed.

Technologies Transforming the Design and Implementation of Tomorrow’s Cities

Increasingly, the tools available to architects, engineers, and construction specialists are becoming more sophisticated and intelligent. From visioning to construction planning, increasing use is being made of the analytic and predictive capabilities of AI. At the same time, the digital drawing board is coming to life through virtual and augmented reality (VR/AR) to create immersive experiences throughout the design, planning, and construction process. Hence, the impacts of a development on the surrounding ecosystem can be modeled to much greater detail than ever before. For example, the implications of a range of events from day-to-day emergencies to natural disasters and security incidents can be simulated to help ensure the robustness and workability of designs and to provide greater confidence in the rigor of risk assessments.

Over time, the capability of the technologies will continue to amaze and astound. For example, the combination of 3D printed structures and rapid building construction may lead to a more agile form of urban planning than can exist today. The spread and embedding of sensors and detectors could also provide vital insights into city life—indicating emerging needs for different parts of the city—from waste collection to traffic control. This idea of treating the physical infrastructure more like software with built-to-suit-and-adapt homes, offices, and public spaces might create cities which respond in almost real time to a range of behavioral fluctuations. Hence, smart cities might evolve in much the same way as businesses add and withdraw software applications, functionality, storage capacity, processing power, and communications bandwidth to suit demand fluctuations. As a practical advantage, this might mean that big events like the Olympic Games could be accommodated rapidly with a largely temporary pop-up infrastructure that then disappears a few weeks after the event, rather than leave a permanent footprint and the costly challenge of ensuring the continued usage and upkeep of facilities.

Another example of these technology tools on steroids is the emerging range of IoT-based home automation and protection products. For example, USA start-up Vayyar is experimenting with the use of 3D imaging to see through walls—meaning no structure would be impenetrable. This omniscient form of surveillance could put building designers and architects in a curious position of having to decide on the aesthetics and purpose of non-load-bearing walls that are technically invisible.

This emerging wave of intelligent cities is typically being designed to enable smart management decisions—capturing and interpreting massive amounts of data about the population and its behavioral patterns, such as water use and traffic flows. This information gathering via different forms of surveillance results in what is called big data. Within five years, the deployment of ever-smarter AI and advanced analytics will mean this function could be completely automated. The data can be collated from a constantly evolving and expanding IoT of devices as described earlier—all literally feeding giant data stores held in the cloud.

A leading example of a smart city in operation is Singapore, with its constantly evolving “city brain.” This backbone of technologies helps control pollution, monitor traffic, allocate parking, communicate with citizens, and even issue traffic fines. Singapore’s “brain” is also attempting to modify human behavior; for example, one system rewards drivers for using recommended mapped routes, and punishes those who do not. Ultimately, Singapore’s planners hope to discourage driving, and steer commuters toward greater use of public transportation. The city is planning for a physical environment of 100 million “smart objects” including smart traffic lights, lampposts, sensors, and cameras on its roadways, which will be used to monitor and enforce laws.

Integrating the Internet of Things

In order for everything from air conditioning to parking meters to function in a smart city, an array of high-tech data gathering gadgetry must be hooked up to the IoT—including cameras, microphones, voice recognition devices, and a variety of sensors and gauges. Vendors and planners are already beginning to explore and model the possibilities presented by this trend toward total data capture. For example, a case study from India suggests that light poles along the highways can offer both smart city and connectivity solutions. In addition to helping monitor road conditions, the light poles could be fitted as high-speed data connections.

Data is a critical element of the smart city/smart road future. However, because this option will further expand the relationship between internet service providers, surveillance, and private business including advertisers, there are several issues around privacy to be considered. Naturally, most would want the information from smart cities and roads to be used to keep citizens moving, healthy, and protected. However, should companies then be allowed to target users with adverts based on this information when it was collected for other purposes?

Smart Roads and Smart Mobility Management

Within and between the smart cities of the future, smart roads in particular are where planners can put into effect many of the ultra-efficient mechanisms that best characterize their vision. In general, the concepts around smart cities, smart roads, and smart infrastructure are becoming less hype-laden and more strategic and sustainable by the day. As cities grow in size and importance to the global economy, it will be increasingly important that they adopt the most innovative and forward-thinking design and sustainability ideas—particularly around road infrastructure. As a smart future unfolds, three important new technologies—big data, the IoT, and renewable energy—are being used in parallel to transform the day-to-day.

South Korea, for example, is planning an entire network of smart roads by 2020. This will include battery-charging stations for electric vehicles (EVs) as well as infrastructure to handle autonomous vehicles. The introduction of driverless vehicles requires roads to be transformed into information superhighways as vehicles will need to communicate with each other and the city infrastructure. Mapping, traffic signals, and safety regulations, for instance, are all parts of the physical and digital infrastructure that will have to become highly coordinated for autonomous vehicles to function safely and effectively.

All this data will enable decisions that make efficient use of space, fuel, water, electricity, and waste products, with an emphasis on sustainability. For example, anticipating major traffic jams to provide alternative routes—reducing journey time, fuel consumption, and the impact on the city infrastructure.

The smart city movement now afoot has the potential to transform the organization of people and physical objects in a way that transcends urban development as we know it. The shift to smart infrastructure is not simply fashionable or aspirational; in many ways, it appears to be a critical enabler of the future sustainability of cities. It can be argued that the future of human life on the planet rests on a smooth transition to cities that are more efficient, less wasteful, and more conscious of the impacts of the individual upon the greater good. This may include a range of new negotiations along the boundaries of individual freedom and privacy; for example, replacing human drivers with self-driving cars in the hope of preventing death and injury in auto accidents, increasing traffic efficiency, and reducing environmental impacts. Similarly, to reach municipal conservation goals, we might have to agree to invasive monitoring of waste generation, energy, and water use in the home. These are the kinds of tensions that future planners will need to wrestle with on a continuous basis.

The challenge and opportunity for leaders, planners, architects, engineers, and construction specialists are clear. The smart city shouldn’t be an apocalyptic future where citizens are stripped of their free will, and we cannot be seduced by the technoprogressive view that the pursuit of smart roads will lead to utopia. However, it is now possible to create and deliver a city vision with citizens at its heart—one that is enabled by forward-thinking infrastructure planning coupled with judicious use of enabling technologies. A well-thought-through vision, enabled by a robust and well-executed smart city model, could provide a foundation stone for the next stage of our development, where science and technology are genuinely harnessed in service of creating a better place for current and future city residents.

• How can we develop the required forward-thinking managerial and leadership capabilities within cities and among those who design and build them?
• How can we ensure that those involved keep the citizen at the center of strategies and projects delivering our smart city visions?
• Which concepts and technologies are most central to bringing about the smart vision for your city?

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-3357028/ by PIRO4D

By Rohit Talwar, Steve Wells, Alexandra Whittington, Helena Calle, and April Koury

How might the events sector change to meet the needs of an increasingly digitized delegate community?

Forces Shaping the Future of Meetings

The next five years promise to bring fundamental changes across society—from the clients we serve, to the technology we use, and the needs and priorities of business—literally everything is up for grabs. At the same time, societal shifts, changing delegate and employee expectations, economic turbulence, and financial uncertainty will all add to this mix. Collectively, they will create complexity, new opportunities, unexpected challenges, and a pressure to stay ahead of the game in spotting what’s next. Here we outline 20 developments that could potentially become major industry trends over the next five years. We start with two macro factors that could have global impact.

Macro Factor 1—New Inspiration

Conferences will have an increasingly interdisciplinary focus—in many sectors, participants will tire of hearing the same industry speakers and vendors saying roughly what they said last year! In the search for inspiration to maintain attendance levels, organizers will increasingly invite inspiring people from different fields—arts, science, music, business, education, or engineering—to share their ideas with participants. The convergence of people coming from different fields and those from the sector, will contribute to more creative ideas and solutions for the complex issues shaping the future of every sector.

Macro Factor 2—Global Economic Tensions

Businesses the world over are struggling to understand what form the UK’s exit from the European Union might actually take—or if it will happen at all. Should it happen, the process might take five or ten years to complete fully. There is likely to be a high level of uncertainty and chaos. At the same time, we have growing concerns over the rise of economic nationalism and the possibility of trade wars between the USA and its major commercial partners. As these stories continue to unfold there will be growing demand for events which help suppliers to major economies understand the latest picture and implications for their sector. For the meetings industry, the key here will be the ability to organize and promote relatively short, high quality, sector-specific events at speed.

20 Meetings Industry Changes on the Horizon

1. #metoo Charters—The meetings industry will take positive action in the wake of the harassment and assault cases made public across many sectors in 2017 and 2018. Codes of conduct will appear covering behavior at events; participants will be asked to sign these to confirm their adherence. Reporting of incidents will be made easier and more discreet, and offenders’ organizations will be notified immediately when such issues arise.
2. Political Uncertainty—For the travelers to the USA, uncertainty will continue over whether travel bans, or enhanced border vetting, will be in place for visitors from a range of countries. This may lead some organizers to locate global events in locations with no such restrictions.
3. Smarter by Design—The deployment of artificial intelligence (AI) in the sector will expand rapidly. We are likely to see AI tools become a feature across the entire industry value chain. Applications will range from designing agendas, setting prices, and targeting potential attendees through to customer service chatbots, determining best fit locations, matchmaking people at events, and providing backup content and fact checking of presentations. In a very human business such as the events sector, it seems likely that AI will be used to free up time for value-adding tasks rather than reduce headcounts.
4. Business Model Experimentation—In a world where new charging models are proliferating, there will be a growing pressure on events to bring greater creativity to bear. From paying based on the perceived value and seat auctions through to pay per session and results-based charging, the sector will be exploring a range of attendee payment ideas.
5. Silent Conferences—Participants will be able to tune in to every parallel session via their personal devices and listen through their headphones from wherever they are in a venue. So, if the current session doesn’t appeal, you can simply switch to listen to or watch another parallel session without leaving your seat.
6. Real-Time Conference Agendas—Participants will be able to use meeting apps to schedule impromptu sessions held in any available space—coffee bars, lobbies, exhibition floors, even car parks. The speaker will talk into a microphone attached to their own smartphone and have the talk broadcast to those who tune in to that particular channel. Attendees will be able to view presentation slides and hear the speaker via their own device and headphones. So, no matter how noisy the background, the audience will be able to understand you perfectly clearly.
7. Next Generation Meeting Scheduling—The intelligent assistants (IA) on our phone, or on the meeting app, will book appointments and meeting locations for us based on the types of people we say we want to meet. The IA will scan the attendee list, find the people who fit the criteria we’ve defined, and then contact their IA to request and set up meetings.
8. Stress Centers—Concerns over our mental wellbeing are rising across society, and workplace stress is reaching epidemic levels in some sectors. Events will start to include facilities where participants can talk discretely to counselors and therapists about their issues.
9. Thinking Hubs—Meeting venues will have interactive technology that will enable creative thinking and idea testing. Interactive technologies such as virtual reality (VR) or augmented reality (AR) will allow participants to visualize data or ideas developed in a workshop session in a more tangible way. Participants will be able to test different ideas in VR/AR software and compare their possible outcomes to make better decisions.
10. Integrated Events Apps—Users will not have to download individual apps for each event. Integrated systems will emerge that present content for multiple events—these may even become standard features on many smartphones. App developers will create more cohesive systems that merge the information and presentations of all the different events that sign up to use them. Users will have the opportunity to browse for the most interesting and useful information across a range of events and conferences—perhaps making micro-payments to access content from the events they didn’t attend.
11. Digital Twins—Early adopters of technology could soon be able to send a digital stand-in to attend face-to-face conferences. The participant’s digital twin would be a software incarnation of the person embodied (or not) by a hologram or device that can see, hear, and observe the event in real time. The digital twin could engage with other participants in virtual space or on social media during the event, leading up to scheduled face-to-face meetings with interesting contacts at later points in time.
12. Robot Realms—Events will make greater use of robots as mobile customer service assistants, kitchen staff, baristas, waiting staff, security guards, and porters. We’ll also see more robots featuring in presentations and even delivering them. Within facilities we might see drones capturing videos of the sessions, transporting goods, and even moving people between sessions.
13. Paradise Unplugged—Some meetings will be elevated to a luxury experience by adopting technology-free policies that demand unplugging, disconnecting, powering down, and “off-gridding” for all participants. Events will set a tone of intimacy and authenticity by discarding the free Wi-Fi and discouraging conference hashtags, for example. The venues would provide a facility at check-in where participants can drop off their devices for the day and unplug, putting a total focus on the experience at hand.
14. Cryptoculture—With the rising profile of digital currencies like Bitcoin, the next five years could require the meetings sector to adapt to customers interested in paying with cryptocurrencies. Being prepared to accept payments via Bitcoin and other digital currencies would be an important step; there may also be new risks at hand when it comes to having anonymously paid fees, which is the nature of Bitcoin but unconventional in terms of event planning.
15. Cryptoeventing—There is likely to be a massive expansion of events about and related to blockchain and cryptocurrencies as investment interests grow and the public becomes more and more curious about the potential of both. A growing number of industry conferences will also look to add content about the potential impact and use of blockchain and cryptocurrencies in their sector.
16. Circular Economies and Zero Waste—The meetings and conference industry will come under growing pressure and take greater action to alleviate food, energy, and water waste. Scientific studies have shown that the Earth’s ecosystems are weakening due to inefficiencies in current economic structures and distribution systems. So, for example, millions go hungry while fresh food is routinely discarded. Events and meetings that put into practice the principles of circular economies and zero waste, and philosophies that encourage reuse and discourage overconsumption, might have a powerful role to play in the future where natural resources, even food, could be in short supply.
17. The Replaced—As the automation of work and jobs progresses as an economic force, it is possible that there will be a rise in the number of unemployed people due to technological disruption. Events and meetings aimed at this audience might emerge as an opportunity for the meetings sector. Past employers, governments, other sponsors, and even the individuals themselves might pay for seminars, conferences, education sessions, and certification courses aimed at counseling, reskilling, and retraining these displaced individuals. Indeed, these could become regular events in many local communities.
18. Big Brother—Events that gather large numbers of participants could become attractive to proponents of the growing Internet of Things (IoT) and smart city movement. Attendees of large events might earn rewards, discounts, or actual money for agreeing to use devices that track their movement and behavior during business conventions or meetings. Such attendee data would provide key insights to exhibitors, and non-participating marketers, for example those targeting the business traveler.
19. Tracking Delegates—Marketers will place ever-greater value on knowing how participants spend their time, which stands they visit, what they look at on specific exhibits, who they talk to, and how long for. Of course, this might all seem very intrusive, so it would need to be the choice of the individual attendee as to whether they were tracked or not. For event venues, large exhibition spaces might provide the perfect venue for IoT vendors to set up demonstrations and smart city simulations.
20. Enhanced-Friendly—People are beginning to pursue a range of brain and body enhancements—chemical, genetic, physical, and electronic. From nootropic attention-stimulating drugs and supplements through to body strengthening exoskeletons, and genetic modification, the sci-fi notion of “bodyhacking” is becoming a reality. Event planners will increasingly need to consider the needs of these enhanced visitors. As biohacking and bionics go from fringe to mainstream, how will meeting planners adapt to dealing with customers, colleagues, and vendors who are partially enhanced? Within the next five years, various forms of biotech implants could become more normalized, giving some individuals superhuman hearing, vision, or memory. As the sensory spectrum is expanded, will meetings be expected to accommodate the needs of the enhanced human?

The Point of No Return

The next five years could see more dramatic change taking place in the meetings sector than we have seen since its emergence. A powerful combination of economic, social, technological, and environmental factors will create new opportunities and challenges and force the sector to undertake a fundamental rethink of literally every aspect of what it does. Some will act fast to be ahead of the curve and use these impending changes as an opportunity to innovate in advance of the competition; others will inevitably wait until they are forced to by customers and competitive pressures. The choice over when to act is down to the individuals involved—but panic and crisis driven strategies rarely provide sustainable business advantage.

• Other than technology, which areas of the economy, life, and society might have the biggest future impact on the events and meetings industry?
• How might the job roles in your organization be impacted by some of the 20 trends described above?
• What might be some of the critical skills required to ensure a viable future for businesses in the meetings and conference sector?

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-644549/ by MarckoHeinrich

By Rohit Talwar

What fundamental shifts might characterize the emerging future?

Drivers of the Revolution and Riders of the Storm

Through the pages of this book, two things have hopefully become abundantly clear. Firstly, the old order of everything either has been challenged, is in the process of upheaval, or will be disrupted in the next few years. Secondly, our notions of a linear, controllable, and defensible progression to the future are being overturned. The future is being reinvented, and we are simultaneously playing the parallel roles of initiators, catalysts, investors, beneficiaries, and victims of the changes that will play out.

We are at such an early stage in the change process that it is impossible to know the likely outcomes of all this change. Nor can we pinpoint with absolute accuracy the key themes and shifts that will have the biggest influence in the reimagining of life, society, and business. However, it is clear that there are strong candidates that are likely to have more of a bearing than others. Whilst these are not all unfolding at the same pace, the instantaneous nature of the Internet and a 24/7 news cycle can make it seem that way. Here we identify twenty-one key shifts we see taking place that will be major drivers, or significant enablers, of the future reinvented.

Life and Society

1.  Harassment and Assault: From why me to #metoo – The #metoo change movement will gather momentum, and victims of sexual abuse and harassment around the world will continue to find the courage and support to challenge the offenders.The abuser’s fall from grace will be massive and visible—encompassing the church, the military, the professions, sports, media, entertainment, politics, and business. Successive waves of public apologies, enforced resignations, and early retirements will lead to fundamental changes of policy, practice, and protection in all these sectors and drive a shift in the balance of power towards the victims.

2.  Spirituality: From possession to purpose – As society becomes more technologically dependent and pressurized, people are increasingly looking for a sense of purpose that goes beyond material achievements and possessions into the realms of spiritual fulfilment. From religion to meditation and yoga, we are pursuing alternative routes to enlightenment. There is also a growing sense that the source—of the power and guiding inspiration we seek—may lie within us rather than outside.

3.  Privacy: From birthright to asset – In many nations, the right to privacy has, in the past, been seen as a birthright. Government policy and technology have changed that. Governments have gradually assumed the right to know more about us, and the major online players and personal technology providers have amassed vast stores of information on our lives.

Most of us have scant knowledge of what’s being collected or how it’s being used. We have effectively traded our privacy for the right to access certain services and information. Ironically, smart personal technology may gradually give us back control over that information and curtail the extent of the surveillance capitalism we are subjected to. We may increasingly be able to decide the tradeoffs we make with our personal information and when we’ll chose to trade that asset in return for things that we value.

4.  Mental Health: From my little secret to our collective responsibility – There are rising levels of pre-clinical and clinical mental health issues across society in both developed and developing nations. Stress levels are also expected to rise as the pace of technological unemployment increases. Organizations will be judged on their capacity to address and minimize workplace stress.

5.  Relationships: From monogamous to multivariant – The conventional model of a monogamous relationship with a lifetime partner is being challenged in multiple ways. The most obvious example is that of people pursuing polyamory and open relationships in a transparent manner. Alongside these models, we see multi-functional relationship models where one person might fulfill their romantic, child raising, emotional, and intellectual needs through separate partners of possibly different genders.

6.  Parenting and Home Making: From bed maker to bread winner – Women are consistently outperforming men at every level of the education system globally. Gradually, barriers to opportunity and glass ceilings are being dismantled and pay gaps eroded. The pace is expected to quicken—changing workplace cultures and driving a reversal of parenting and home maker roles within the family.

7.  Sex: From constrained to conscious – As people seek more meaning and purpose from life overall, a major shift in attitudes is taking place around sex. Clearly, many are still focused on consumption, influenced by pornography, and adopting a balance sheet accounting approach – demanding reciprocity for every act. There is though, a growing interest in a more conscious approach that sees sex as part of the process of deepening connection. The coming together of spirituality and the pursuit of a more enlightened approach to sex are part of what lies behind the increasing popularity of connection based practices such as tantra and orgasmic meditation.

8.  Augmentation: From human to post-human – A range of chemical, genetic, electronic, and bio-mechanical augmentations are starting to allow us to change the very nature of being human. To keep up with technology and the pace of modern life, we will be opting for enhancements, from extending life expectancy and changing our genomic make-up, to enhancing physical strength and augmenting our cognitive powers.

9.  Education Systems: From control to nurture – Education systems around the world are widely seen to be glaringly out of date and unfit for purpose. Technology is expected to play an increasing role, with some reports suggesting that it could take over 75% of what teachers do. The opportunity here is to reinvest that time in nurturing focused tasks rather than student control. Teaching roles will gradually shift to helping pupils learn skills—such as collaboration, problem solving, scenario thinking, and accelerated learning techniques—that will be applicable whatever their future might hold. The Internet is also driving interest in home schooling as the best content becomes available for free.

10. Work: From defining purpose to pastime of choice – Across the planet, people are beginning to understand that technologies such as artificial intelligence (AI) and robotics could mean that we may need a lot less people to work in paid jobs in the future. Concepts such as universal basic incomes and services may become a reality in this next decade to help people fund a reasonable lifestyle.

Those that do choose to work may do so simply for social connection and the physical or intellectual challenge, rather than as a means to earn money. Phrases like “long-term unemployed” and “burden on society” may start to disappear from society’s vocabulary as the realization grows that we might just be seeing the beginnings of the end of work.

Politics and Economics

11. Politics: From the center to the edges – We can expect to see a continued shift towards, and growing calls for, devolution of power to a more local level. From Brexit to separatist movements in Catalonia and beyond, pressure will rise to escape the distant hand of central control. Not all will succeed in securing independence, or in making a success of it, but the pressure will mount.

12. The US Presidency: From sovereign standards to situational solutions – President Trump has challenged all traditional notions of how he should conduct his role and what constitutes acceptable Presidential behavior. From his use of Twitter and deliberate misrepresentation of facts through to his direct attacks on individuals—Mr. Trump has effectively widened the Presidential playing field.

13. Transparency: From nothing to say to nowhere to hide– Governments, institutions, and individuals will find it increasingly difficult to keep anything secret. For at least the next decade, hacker collectives, and those who support them, will have the resources to access critical data and make it public. Whistle blowers and investigative journalists will keep the spotlight on abuses of power, and the Internet will provide channels to put the content in front of the public.

14. Money: From controlled to chaotic – The rise of digital currencies such as Bitcoin have challenged the notion that only central banks could issue globally tradeable forms of money. The decade ahead is likely to see a proliferation of cryptocurrencies, and governments and financial exchanges authorizing their use in trading. At the same time, governmental desire to know what people are doing with their money will clash head on with the anonymity that goes with a Bitcoin transaction. The outcome will be a growing level of complexity and confusion over the potential to transition to a single global currency.

15. Financial Control: From institutions to networks – There is continual erosion of the financial sectors’ monopoly on the processing of transactions and the management of our funds. New FinTech ventures are allowing us to bypass the traditional players to transfer funds between us and raise money from each other directly. The advent of Bitcoin as a currency and blockchain as a mutually assured distributed transaction ledger allow for counter-parties to settle directly with each other without ever going through the traditional middlemen.

16. Tax: From gaming the system to a fairer game – Governments around the world will increasingly seek to grow their tax revenues, close loopholes, and simplify the systems. They will also look to make those systems smarter and more powerful through the use of AI. They also want to be seen to be creating a fairer and more balanced system. At the same time, the risks of technological unemployment could reduce income taxes and sales taxes and increase the pressure to collect more from larger firms and higher earners.

17. Brexit: From bravado to fluidity – The hardened negotiating stance being taken early on by both the United Kingdom (UK) and the European Union (EU) will continue to soften and reshape. Tough talk will be replaced by the pragmatism of finding a solution that doesn’t create total havoc for the UK, but which still discourages other EU members from trying to leave. The challenge for the UK will be to leave the EU in name, whilst establishing policies and mechanisms that allow individuals and businesses to behave as though they are still members.

Business

18. Intelligence: From human to artificial – The pace of development in AI is likely to continue at breathtaking speed. Inevitably there will be a growing tendency to replace humans with their more consistent, reliable, and faster machine counterparts.

19. Business Mindset: From linear to exponential – The exponential growth in performance of many technologies is driving firms to pursue similar improvement rates across their business in sectors as diverse as construction and car manufacturing.

20. Knowledge: From expert curated to discovery led – Technology is eroding the expertise base of traditional advice giver roles from lawyers and consultants, to accountants and clinicians. Increasingly, AI tools will help us seek, sort, and analyze far greater volumes of data than any human can, whilst ensuring that we are drawing on the most up-to-date information. Rather than paying experts to provide a lot of information and opinion to justify their fees, the new tools will increasingly enable us to find the point information and decision options most relevant to our current situation.

21. Employment: From castles to cottages – Whilst the number of organizations with a turnover of US$100 million may grow, the number of people collectively employed by larger national and global businesses is likely to fall as a percentage of the total workforce. Hence, a multi-fold increase is required in the number of small to medium businesses to fill the short- to medium-term employment gap. Clearly, as discussed above, the longer term picture is harder to determine. To support the growth of small and micro start-ups, the amount of support provided to entrepreneurs will need to increase at least exponentially if they are to take up the slack.

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-3219199/ by TPHeinz

By Steve Wells and Rohit Talwar

How might law firms harness the transformational potential of technological change to drive exponential business growth?

We are at the start of a Fourth Industrial Revolution—a wave of transformation fueled by powerful technologies such as artificial intelligence (AI). This could drive a bigger wave of growth in the legal sector than any other change in history. Previous transformations gave us steam-based mechanization, electrification and mass production, and then electronics, information technology, and automation. This new era of smart machines is fueled by exponential improvement and convergence of multiple scientific and technological fields.

So, what is AI? Artificial intelligence is a computer science discipline that seeks to create intelligent machines that can replicate critical human mental faculties. Key applications include speech recognition, language translation, visual perception, learning, reasoning, inference, strategy formation, planning, decision-making, and intuition. The truly transformational impacts arise when AI is combined with accelerating science and technology developments in other fields, including neuroscience, large-scale databases, super-computing hardware, network communications, cloud computing, hyperconnectivity, blockchain distributed ledger systems, the Internet of things, 3D and 4D printing, and digital currencies.

These technologies will transform old industries and accelerate the creation of new ones. All this will generate massive opportunities for law firms, particularly in the corporate sector. However, some lawyers see AI and the technologies it enables as an existential threat to a US$650 billion global industry. They worry about automating their own knowledge, expertise, and advice-based roles. They are particularly concerned about the resultant risks of eliminating differentiation, commoditizing premium revenue streams, losing out to technology providers, depersonalization, and the loss of professional jobs.

While these risks are real, a growing number can smell opportunity, realizing that these technologies will transform the US$75 trillion global economy. By 2025, in a global economy of around US$120 trillion, over half of it will arise from newborn sectors and those that don’t even exist today—such as synthetic energy, autonomous vehicles, self-replicating machines, and adaptive, self-repairing materials. In most cases, we haven’t started to assess the legal implications—and that means opportunity.

What happens when each industry in every country has its “Uber moment”? Ambitious upstarts are, or soon will be, challenging long-established norms and unspoken rules of engagement in every industry. This creates massive opportunities for law firms, whether by representing the innovators, their adversaries, or the regulators.

The changes are happening fast. The legal requirements are real and there is massive potential to build relevant service offerings, acquire new customers, and increase current rates of revenue and profitability growth. In addition, there’s the opportunity to harness the technologies internally to deliver improvements in areas such as professional productivity, responding to client queries, proposal development, research efficiency, and completing multi-jurisdictional submissions.

There are four typical reasons for developing new practice offerings in these emergent areas. Firstly, clients ask the firm to help explore the implications of a new field it is venturing into. Indeed, many law firms now have big practices in internet law, biotech, and cloud computing because clients led them there.

A second approach is where individuals see opportunity and pursue it. A good example is US law firm Perkins Coie, where Dax Hansen, a partner in IT, payments, and international transactions, saw the opportunities arising out of digital currencies such as Bitcoin and their underlying core technology—the blockchain. Hansen launched the first legal industry blockchain practice in May 2013. The firm’s blockchain practice now has over 40 lawyers focused on the legal impacts from digital currencies to capital markets and a range of distributed applications.

A third approach is becoming increasingly popular with small to medium-sized firms, where partners and relatively junior staff are seconded to spend a few days to several weeks truly immersing themselves in a client’s business. This is typically done where the core technology is extremely complex, and the legal ramifications are myriad. For example, there is growing interest in the notion of cryogenically freezing someone on death (or while still alive) with the hope that one day, technology will emerge to restore the physical body, memory, and consciousness of the frozen individual.

Cryogenics has the potential to become a trillion-dollar industry within a decade, and facilities are emerging worldwide. Servicing this sector’s legal needs requires a very deep understanding of cryogenics, the costs and risks involved, the customer commitments being made, the status of the science that might deliver a regeneration solution, and the current status of the sector in law.

The fourth approach is where firms acknowledge the changes taking place and decide to immerse themselves in the opportunity in the hope of building profitable legal offerings for the emerging sectors. Such firms make a conscious commitment to put professional staff at all levels through a deep immersion in the technological enablers of tomorrow’s world. They run workshops and study tours to immerse their leaders and partners across the practice in a deep exploration of the technologies shaping the future and the ways in which they could transform current industries and enable new sectors. The aim is to be at the forefront in advising both the emerging sectors and those impacted by them. For example, in smart healthcare this means that firms advise the technology solution developers, hospitals, regulators, and patient groups.

The goal here is to help partners and business development professionals understand the emerging science and technology in sufficient depth to be able to start meaningful conversations with current and potential customers. Other key steps in the immersion process include joining and participating actively in the formation of industry associations, hosting events for meet-up groups in the relevant sector, attending conferences, and devoting time to reading about the client industry, and writing thought leadership articles on the legal ramifications.

For example, it is almost certain that legal considerations will not be top of mind for the 17-year-old developer of an AI facial recognition app that shows the dating history and associated comments and ratings for everyone you meet in a club. Such an app could prove very popular but fall foul of laws in a number of ways that the developer had never considered. Indeed, as we scan across AI and related technologies and the trillion-dollar sectors they are helping to spawn, the range of legal issues and resulting opportunities are almost overwhelming. For example:

• The emergence of autonomous self-driving vehicles opens up the potential for self-owning assets including buildings and public infrastructure. What issues does this raise around legal liability in the event of failure to perform or when accidents occur?
• If an AI-based system makes a poor decision that leads to a car crash, the death of a patient, or an aircraft being delayed, who will be held liable: the owners of the application, the developer of the underlying AI tool, the provider of the data set from which the system was trained, those guiding the training, or the provider of the technology platform on which the system runs?
• If AI is increasingly used for scientific discovery and the system infringes a patent, who will be held liable?
• Where AI is being used to run hugely complex and interconnected transaction platforms with the trading taking place in digital currencies and via blockchains (i.e. the source of the funds and information about the counterparties is unknown), how can the risk of fraud and money laundering be addressed?
• What procedures will be required for rollback, recovery, contract review, and dispute arbitration for fully automated AI and blockchain-based financial transaction systems?
• How should we account for the jurisdictional and taxation implications of firms that are using AI systems to move their financial assets around the world on a continuous basis in real time to attract the best second-by-second interest rates?
• How should we write the contracts for goods and services when AI tools are being used to define and combine the elements of the offering and set the pricing in real time based on the user’s profile and requirements?
• Precog systems are emerging that can predict an individual’s propensity to crime. What governance frameworks might be required for such AI-enabled “pre-crime” units?

We have focused quite deliberately on the potential of AI and emerging technologies to create exponential business growth opportunities in the marketplace. There are also immense opportunities to drive exponential improvements within the firm, in the products and services it provides, and in the ways it delivers its offerings. We have identified seven distinct areas of opportunity:

• Automation of legal tasks and processes;
• Decision support and outcome prediction;
• Creation of new product and service offerings;
• Development of tools and applications for in-house legal teams;
• Process design and matter management;
• Practice management; and,
• Fully automated online services.

In all of these areas, live AI applications are already in use or under development across the legal sector. In the next five years, we will see an explosion of legal opportunities arising from the transformation of existing sectors and the emergence of new ones. Artificial intelligence and related technologies will enable and accelerate the birth of new markets, commercial concepts, business models, and delivery mechanisms—spawning ideas we would struggle to get our heads around today.

Growth-motivated law firms of all sizes are “giving themselves permission” to invest the time and energy to embrace this new world thinking that could deliver exponential growth. The big question for everyone to ask is: What will it take for our firm to believe it can be a winner in the exponential future of legal?

• What would the new quality standards for law firms be in the exponential future of legal and AI?
• How should law firms divide their innovation time and resources between developing new externally-focused practicing offerings and improving internal processes?
• What are the biggest changes we might see in the legal profession as a result of the introduction of AI?

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-3382521/ by geralt