How to Prepare Now for What's Next E-Book

Michael McQueen

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Sprache: Englisch

Seitenzahl: 455

Veröffentlichungsjahr: 2018

Beschreibung

Disruption is changing the playing field - keep your successful business on top Thriving businesses on top of their game are targets for disruption. But for savvy business owners and managers who understand the coming changes, the time to future-proof their successful companies is now. Following over a decade of research into future trends, business reinvention and disruptive innovation, author Michael McQueen presents How to Prepare Now for What's Next, a blueprint for top companies to thrive in turbulent times. McQueen brings rare insight to the topic of business disruption. The book first explores the notion of disruption itself, and confirms that the term is much more than just guru-speak. The book outlines the four primary forms of disruption that McQueen sees playing out over the next 5-10 years, and quickly moves on to the in-depth tools, tips and techniques that healthy businesses will need to stay on top. * Use a simple tool to assess just how vulnerable to disruption your company is * Read case studies, research and trend reports that highlight real-world examples to complement the book's concepts * Understand the four forms of disruption, namely widescale automation, empowered consumers, unconventional competition and emerging generations * Apply the 9 keys to future-proof your business against disruption and make it impervious to change The time to act is now for the businesses who want to keep their edge, and How to Prepare Now for What's Next is the guide to continue thriving.

Leseprobe

How to Prepare Now for What’s Next is a must-read for all those who wish to remain relevant. Michael points out the speed of change in our world and that now is not the time for leaders to simply tweak our organizations. Now is the time for change. Congratulations Michael on providing us with a useful path to follow.

— Barry Rassin, President, Rotary International 2018–19

In business today, you can’t design your future by analysing the past. With our world changing so fast, the counsel of a wise and practical futurist such as Michael McQueen is more important than ever.

— Andy Berry, Managing Director, Ricoh Australia

Disruption is a concept that is widely cited but often poorly understood. In his latest book, Michael McQueen provides the insight and strategies that leaders have long been seeking. This book is your practical guide to future-proofing your business in an age of disruption.

— Ben Lloyd, Chief Operating Officer, Baker Tilly International

This book offers a powerful roadmap to the future that every leader should read. Michael provides a compelling vision of the future and asks all of the questions you will need to help you get there.

— Brendan Sheehan, Global Council Member, Association of Chartered Certified Accounts (ACCA)

With Michael’s tips for success, this book is a must-read for anyone looking to stay relevant and embrace the future.

— David Maiolo, Senior Manager Learning & Development, Bendigo and Adelaide Bank Limited

In this new book, Michael McQueen de-clutters a very complicated business world with thorough research and real-life case studies. How to Prepare Now for What’s Next is your ultimate guidebook to retaining relevance.

— David Mulham, Chief Field Development Officer, USANA Health Sciences

Michael has done it again. This book is a true wake up call. Read it now — tomorrow will be too late.

— Fiona Ross, Regional Head of Marketing, Travelport

Complacency is failure in the new economy. As a 112-year old organisation, [for us] Michael’s unique viewpoint in this book is invaluable if we are to serve our members for another 112 years.

— Ian Gillespie, Group CEO, RACQ

In this book, Michael McQueen has clearly identified the unstoppable disruptions that will impact every sector in the coming years. In my industry, healthcare, understanding and proactively addressing the trends he highlights will undeniably result in business success but more importantly in improved patient outcomes.

— James Britton, Senior Corporate Development Manager, Multinational healthcare company

How to Prepare Now for What’s Next captures Michael McQueen’s unique insight into what the future holds. This book is smart, provocative and a great resource for helping any leader prepare for what is next.

— Jennifer Jones, 2017 Global Vice President, Rotary International

Michael has an innate ability to simplify the enormous complexity of change and then provide practical advice to business leaders. How to Prepare Now for What’s Next is a compelling read and an invaluable tool for anyone wanting to stay ahead of the game.

— Karin Sheppard, Regional Chief Operating Officer, Intercontinental Hotel Group

Michael’s books have changed how I think about the strategic direction of our company. We can’t solve our issues with yesterday’s thinking. Michael’s thought-leadership is refreshing and invaluable.

— Kevin Guest, CEO, USANA Health Sciences

Michael does a superb job of simplifying the complex and provides leaders with a structured approach they can follow in order to stay one step ahead of disruption.

— Mark Merritt, Associate Director, KPMG

How to Prepare Now for What’s Next implores us to accept the inevitability of change and face it by empowering those we lead to help create the future. Michael McQueen will inspire you by shining a light on the path forward for any business or industry.

— Martin Nelson, Automotive Industry Executive

Michael McQueen has an uncanny knack of making very complex topics seem simple. This book offers techniques that will help you make good business decisions in the eye of a proverbial perfect storm of disruption.

— Steven Johnston, Chief Executive Officer, ProVision Optometry Group

The future is here — you just need to know where to look. Through his new book Michael brings the future to our doorstep.

— Mike Baird, former NSW State Premier

Michael is one of those rare people who make the complex simple. This book has all the ingredients for learning how to thrive in turbulent times.

— Nick Hakes, General Manager

HOW TOPREPARENOWFORWHAT’SNEXT

A GUIDE TO THRIVINGIN AN AGE OF DISRUPTION

MICHAEL MCQUEEN

First published in 2018 by John Wiley & Sons Australia, Ltd 42 McDougall St, Milton Qld 4064 Office also in Melbourne

© John Wiley & Sons Australia, Ltd 2018

The moral rights of the author have been asserted

All rights reserved. Except as permitted under the Australian Copyright Act 1968 (for example, a fair dealing for the purposes of study, research, criticism or review), no part of this book may be reproduced, stored in a retrieval system, communicated or transmitted in any form or by any means without prior written permission. All inquiries should be made to the publisher at the address above.

Cover design by Wiley

Cover image © o-che / Getty Images

Author image: © Toby Zerna

Disclaimer

The material in this publication is of the nature of general comment only, and does not represent professional advice. It is not intended to provide specific guidance for particular circumstances and it should not be relied on as the basis for any decision to take action or not take action on any matter which it covers. Readers should obtain professional advice where appropriate, before making any such decision. To the maximum extent permitted by law, the author and publisher disclaim all responsibility and liability to any person, arising directly or indirectly from any person taking or not taking action based on the information in this publication.

To my firstborn, Max.

You will inherit the world depicted in this book and I am honoured to help prepare you for the future that awaits.

CONTENTS

About the Author

Introduction

Stunned by the Pace of Progress

The Perils of Prediction

A Unique Time in History

Part I: The Four Key Disruptions

Chapter 1 Widescale Automation

The Attraction of Automation

The AI Spectrum

The Impact of Automation

Questions for Reflection

Chapter 2 Empowered Consumers

Real Challenges for Real Estate

The Empowered Audience

The Three Sources of Consumer Power

3D Printing and The Rise of The Prosumer

Questions for Reflection

Chapter 3 Unconventional Competition

Lessons from History

Media and Entertainment

Automotive

Energy

Travel and Tourism

Banking and Finance

Responding to Unconventional Competition

Questions for Reflection

Chapter 4 Emerging Generations

Which Demographics Now Dominate

The Millennial Mindset

Retail

Automotive

Banking and Finance

Travel

Sport

Engaging Millennial Consumers

Market Through Them, Not to Them

Millennials As A Disruptive Workforce

Questions for Reflection

Part II: 9 Keys to Thriving in An Age of Disruption

Chapter 5 Dig the Well Before You Get Thirsty

With Businesses As it is with Bunnies

Three Ways to Dig The Well Before You Get Thirsty

What Do You

Know

? What Do You

Own

? What Can You

Do

?

Questions for Reflection

Chapter 6 Fail Fast, Frequently and Frugally

No Licence for Recklessness

Failing Slowly is Painful

Magnitude Matters

Three Ways To Build A Risk-Taking Culture

Questions for Reflection

Chapter 7 Don’t Pave The Cattle Track

What Needs A Fundamental Rethink, Not A Superficial Retread?

The Power of A New Paradigm

The Kodak Mindset That Ended The Kodak Moment

The Shift to A Subscription Model

The Blessing of Isolation

More Than Just A Mindset

A New-Look Library

Microsoft Gets Back on Track

The Dangerous Attraction of Cattle Tracks

Questions for Reflection

Chapter 8 Foster Healthy Paranoia

1. Resist The Intoxicating Effects of Success

2. Prioritise The Peripheral

Three Ways to Develop Your Peripheral Vision

3. Encourage Diversity and Dissent

Questions for Reflection

Chapter 9 Focus on Friction

When Friction Becomes A Foothold

The Most Powerful Innovation Skill Begins with An ‘E’

Making The Customer The Boss

The Power of Observation

Three Questions for Identifying Friction

Questions for Reflection

Chapter 10 Be Different, Not Better

The Remarkable Retailer

The Disappearing Department Store

Three Ways to Be Remarkable

Questions for Reflection

Chapter 11 Spare No Sacred Cows

The Making of A Sacred Cow

Three Ways to Identify Sacred Cows

Lessons from Lego

Questions for Reflection

Chapter 12 Adopt A Posture of Curiosity

1. Ask Good Questions

2. Create Capacity

3. Observe Obsessively

4. Look for The Unexpected

5. Democratise Innovation

6. Leverage Common Creativity

7. Foster Fresh Eyes

Questions for Reflection

Chapter 13 Think Like A Startup

1. Agility and Responsiveness

2. Action-Orientation

3. A Purpose-Driven and Entrepreneurial Culture

Questions for Reflection

Conclusion

Appendix A: The Disruptibility Index

How Prone to Disruption are You?

Appendix B: The Societal Implications of Automation

Will Your Job Be Taken By A Robot?

Disruption-Proof Professions

Career Advice in The Age of Automation

The End of Middle Class and Middle Management?

The Bright Future of Automation

A Balanced Perspective

So What is The Best Response?

Beyond the Economics

Acknowledgements

Index

EULA

List of Illustrations

Chapter 13

Figure 13.1

: employee paradigm hierarchy

Guide

Cover

Table of Contents

Introduction

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ABOUT THE AUTHOR

Michael McQueen understands what it takes to thrive in a rapidly evolving world.

Widely recognised for having his finger on the pulse of business and culture, he has helped some of the world’s best-known brands navigate disruption and maintain relevance.

As a leading specialist in social shifts, change management and future trends, Michael features regularly as a commentator on TV and radio and has written five best-selling books.

Michael is a familiar face on the international conference circuit, having shared the stage with the likes of Bill Gates, Dr John C. Maxwell and Apple co-founder Steve Wozniak. He has spoken to hundreds of thousands of people across five continents since 2004 and is known for his high-impact, research-rich and entertaining conference presentations.

Michael was recently named Australia’s Keynote Speaker of the Year and was inducted into the Professional Speakers Halls of Fame.

He and his family live in Sydney, Australia.

www.michaelmcqueen.net

INTRODUCTION

As I walked out the doors of my grandmother’s nursing home on a sunny autumn day a few months ago, my mind was still processing the four hours I had spent with her that morning.

At the ripe old age of 93, my grandmother isn’t showing any hint of slowing down. She’s sharp as a tack and disarmingly irreverent. That day I had cleared my schedule to sit down with her and capture elements of her life story and my family heritage. As we sifted through scores of brown leather journals filled with beautiful handwritten script, dusty photo albums and countless loose documents, many of the names and stories I had heard throughout my childhood came to life.

My grandmother reflected on her career as a nurse and welled up when she recounted the day soldiers returned from war, maimed and broken. ‘Shells of men’ was the way she remembered them.

She recalled how as a young girl she’d watched the Sydney Harbour Bridge take shape over many months and wondered how cars would ever be powerful enough to drive up its steep arches — unaware that the arches were little more than a scaffold for the suspended road plate below.

As I drove home through the very suburbs in which many of the stories I had heard that morning had played out, I tried to imagine how the same city looked, sounded and smelled in my grandmother’s early days.

My train of thought was interrupted by a phone call from my publisher, Lucy Raymond. I had left a message on Lucy’s voicemail the previous day mentioning I had an idea for a new book.

‘I’m excited to hear about this new book,’ she said. ‘What have you got in mind?’

In a flash, my thoughts were jolted from imagining how the street I was driving down would have looked in the 1930s to pitching the premise for the book you now hold in your hand. As I described my vision for a book that would help leaders and organisations navigate disruptions ranging from artificial intelligence to driverless cars and nanotechnology, the contrast with the morning I’d just spent with my grandmother couldn’t have been more stark.

Stunned by the pace of progress

I’m sure you know the feeling. Every now and again most of us catch ourselves reeling at the nature and pace of change around us.

As someone who has spent well over a decade studying trends and forecasting disruption, I still find myself amazed when I reflect on the things I take for granted today — things that would have been utterly inconceivable a few short decades, much less centuries, ago.

To this point, celebrated blogger and TED speaker Tim Urban offered a great little thought experiment in a 2015 blog post where he encouraged readers to imagine teleporting a person from the nineteenth century to the modern day.

As Urban suggests:

It’s impossible for us to understand what it would be like for him to see shiny capsules racing by on a highway, talk to people who had been on the other side of the ocean earlier in the day, watch sports that were being played 1,000 miles away … This is all before you show him the Internet or explain things like the International Space Station, the Large Hadron Collider, nuclear weapons, or general relativity. This experience for him wouldn’t be surprising or shocking or even mind-blowing—those words aren’t big enough. He might actually die.1

And so while the modern day is extraordinary enough, much of my time is dedicated to forecasting the trends and changes that would spin our minds were we able to travel even a few decades forward in time.

The perils of prediction

Now, to be clear, this is not a book about pie-in-the-sky futurism. As stimulating as it can be to gaze into crystal balls, predicting the future can be a pretty risky business. As I recently heard one business strategist suggest, when it comes to predicting the future, humility is a virtue.2

Consider how many bold predictions by intelligent people throughout history have proven to be just slightly off the mark:

∞ Ken Olsen, founder and chairman of computer giant DEC, said in 1977, ‘There is no reason anyone would want a computer in their home’.

3

∞ The legendary American businessman and inventor Alex Lewyt predicted in the 1950s that ‘Nuclear powered vacuum cleaners will be a reality within 10 years’.

4

∞ A Boeing engineer boasted ‘There will never be a bigger plane built’ when Boeing’s 10-seater Model 247 was launched in 1933.

5

∞ Lord Kelvin predicted in 1883 that we would one day discover that x-rays were a hoax all along. (It bears mentioning that Lord Kelvin was no fool. In fact, he was instrumental in formulating the first and second laws of thermodynamics and devised the method for measuring temperature we still use today.)

6

∞ Steve Jobs predicted the failure of Amazon’s Kindle ereader upon its release because, in his words, ‘It doesn’t matter how good or bad the product is, the fact is that people don’t read anymore’.

7

If nothing else, this list underscores just how hard it can be to predict the future with any degree of certainty. In the words of legendary film producer Samuel Goldwyn, ‘Only a fool would make predictions — especially about the future’.8

And yet of all the sensational business predictions that have emerged in recent years, one stands out in my mind above the rest. In June 2015, the retiring CEO of Cisco, John Chambers, delivered his final keynote address. He left the audience in stunned silence (and panicked much of the business world) when he said, ‘40 per cent of businesses in this room, unfortunately, will not exist in a meaningful way in 10 years’.9

The coming decades will see many businesses and industries disrupted in ways they cannot imagine today.

Now while you could dismiss this prediction as misguided hyperbole, the reality is that Chambers may well be spot on. After all, according to the work of Professor Richard Foster of Yale University, ‘the average lifespan of a major listed company has shrunk from 67 years in the 1920s to just 15 years today’.10

I have spent much of the Past decade interacting with and interviewing some of the brightest and most visionary thinkers on the planet and their consensus is that the coming decades will see many businesses and industries disrupted in ways they cannot imagine today — and certainly are unprepared for.

My interest in this started back in 2011. As significant businesses crumbled in rapid succession (from Borders to Kodak, Saab and Nortel, then BlackBerry and Blockbuster), what started out as a blog post for my website turned into a three-year research project examining the dynamics of business demise. Over the course of those three years, I tracked 500 brands, organisations and institutions around the world in an effort to answer two questions:

Why do the mighty fall?

Why do the enduring prevail?

My goal was to try and discover the habits, culture and mindset that separated enduring brands from their endangered counterparts. Those three years of research culminated in a book called Winning the Battle for Relevance.

While that book proved helpful for leaders and organisations trying to stay at the cutting edge, I quickly discovered that the scope of my research had been too limited. After all, it only identified the factors that were driving obsolescence for organisations and brands in the present.

In the years since that book’s release, the scope of my research has shifted to what lies ahead and the specific trends and disruptions that are set to shake up the status quo in significant ways.

A unique time in history

Having spent much of the past few years absorbed in the future, there is little doubt in my mind that we are standing at the precipice of the most significant change our world has known.

Historian and United States Senator Ben Sasse agrees:

When people say we’re at a unique moment in history, the historian’s job is to put things in perspective by pointing out that there is more continuity than discontinuity, that we are not special, that we think our moment is unique because we are narcissists and we’re at this moment. But what we are going through now — the past 20 or 30 years, and the next 20 or 30 years — really is historically unique. It is arguably the largest economic disruption in recorded human history.11

Political scientist and international relations expert David Rothkopf agrees that we are at a significant and historical moment. That said, in his excellent book The Great Questions of Tomorrow, Rothkopf does liken this current point in history to one experienced by our fourteenth-century forebears who had little idea of the sweeping societal changes that the Renaissance was about to usher in:

As was the case during the fourteenth century, we too are living in what might be described as the day before the Renaissance. The epochal change is coming, a transformational tsunami is on the horizon, and most of our leaders and many of us have our backs to it.12

Rothkopf suggests that this lack of awareness of and preparedness for what lies ahead is a function of our very human nature. As humans, we operate with a range of biases and we expect the world to confirm them. As a result, we mishear, misread and misinterpret events around us. We live in a world where 85 per cent of the time today’s weather is the same as yesterday’s weather; people tend to let the immediate past shape their expectations of the future.13

As humans, we operate with a range of biases and we expect the world to confirm them.

And yet the future is going to be very different from what any of us have known. We are sailing into uncharted waters. We are at an inflection point where we cannot discern what the future will hold by looking to the past.

And that’s the purpose of this book — to get a clear sense of what’s next so we can start preparing now.

In part I, we’re going to look at what the future holds and how to identify the trends and disruptions that are going to radically redefine the status quo.

In part II, I am going to outline a plan for navigating the turbulent times that lie ahead.

So strap in: things are about to get a bit bumpy. But my commitment is to give you the insights and strategies necessary to thrive in an age of disruption.

Notes

1.

Urban, T. 2015, ‘The A.I. Revolution: The Road to Superintelligence’,

Wait but Why

blog, 22 January.

2.

Hamel, G. 2002,

Leading the Revolution

, Penguin, New York, p. 123.

3.

Collister, P. 2017,

How to Use Innovation and Creativity in the Workplace

, Pan Macmillan, London, p. 160.

4.

Szczerba, R. 2015, ‘15 Worst Tech Predictions of All Time’,

Forbes

, 5 January.

5.

Wallop, H. 2008, ‘Bill Gates and Sir Alan Sugar Made Some of Worst Technology Predictions of All Time’,

The Telegraph

, 9 December.

6.

Ibid.

7.

2016, ‘Foot in Mouth: 33 Quotes from Big Corporate Executives Who Laughed Off Disruption When It Hit’,

CB Insights blog,

14 December.

8.

Hamel, G. 2002,

Leading the Revolution

, Penguin, New York, p. 123.

9.

Bort, J. 2015, ‘Retiring Cisco CEO Delivers Dire Prediction’,

Business Insider,

9 June.

10.

2015, ‘Picking the Next Disruption’,

Business Spectator

, 27 July.

11.

Sasse, B. 2017, ‘The Challenge of Our Disruptive Era’,

The Wall Street Journal,

21 April.

12.

Rothkopf, D. 2017,

The Great Questions of Tomorrow

, Simon & Schuster, New York, p. 5.

13.

Ibid., p. 10.

PART ITHE FOUR KEY DISRUPTIONS

When Harvard Business School professor Clayton Christensen first introduced the notion of disruptive innovation in his 1997 bestseller The Innovator’s Dilemma, I wonder if he had any sense of just how profoundly impactful his ideas would become.

And yet while most of the leaders and organisations I work with understand the principles of disruption, many find themselves with little idea of how to predict or pre-empt the very disruptions that are looming large over their businesses and industries. What they often lack is a framework for making sense of the overwhelming barrage of changes they are facing.

After all, it tends not to be linear, incremental or evolutionary; disruption is generally unpredictable, fundamental and revolutionary.

Offering such a framework is my goal in part I of this book. By its very nature disruption is hard to forecast. After all, it tends not to be linear, incremental or evolutionary; disruption is generally unpredictable, fundamental and revolutionary.

So while predicting specific disruptions is difficult, identifying categories or patterns of disruption is far more useful. To this point, I’d suggest that the disruptions that will re-shape the landscape for businesses and organisations in the coming years will fall into one of four broad categories:

widescale automation

empowered consumers

unconventional competition

emerging generations.

Part I will feature a chapter dedicated to each of these four disruption categories that will highlight what is driving the change along with a look at how the disruption is set to play out in a range of industries.

In the words of London Business School professor Gary Hamel, ‘You can’t outrun the future if you don’t see it coming.’1 To Hamel’s point, the next four chapters are designed to give you the clearest possible picture of what is coming so you can get a head start.

Quick tip: Before you go any further, I’d highly recommend you flick to appendix A at the back of this book to complete a diagnostic tool called ‘The Disruptibility Index’. This revealing exercise will give you an objective measure of just how prone your organisation or business is to disruption at this very moment.

Your disruptibility score may well provide a helpful context for what you’ll learn in the coming chapters.

CHAPTER 1WIDESCALE AUTOMATION

It’s not every day that a stocking manufacturer makes history — especially one with an unremarkable name like Ned.

And yet in the late 1770s, that’s exactly what happened. Incensed by the gradual encroachment of new automated knitting machines that threatened to put him out of work, a stocking maker named Ned decided to take matters into his own hands. Smashing a number of these time-saving contraptions to bits in a fit of rage, little did Ned know that he had just sown the seeds of a revolution.

Taking up the cause a few short years later, a group of English weavers and textile artisans banded together in a coordinated assault on the industrial age. Inspired by Ned’s act of defiance, this band of weavers and artisans was soon destroying a few hundred automated looms each month.

As you can imagine, the wealthy factory owners who owned the looms weren’t thrilled. Using their political sway in the British Parliament, these industrialists arranged for almost 15 000 soldiers to descend on the loom smashers to put an end to the destruction. They even managed to have a law passed making the breaking of weaving frames a crime punishable by death — a fairly extreme reaction even by early eighteenth century standards. Dozens of the ‘revolutionaries’ were executed or exiled to penal colonies such as Australia.

Things simmered down in the years that followed, the revolution crushed.2

You may not have heard of Ned but you likely know his surname and the movement he inspired. Ned Ludd and his band of self-described ‘Luddites’ have been widely ridiculed in the history books as backward, small-minded and anti-progress. Even to this day the term ‘Luddite’ is used to describe an individual who stubbornly and naively tries to hold back the march of technological advancement.

It’s important to note that progress was not the chief complaint of the Luddites. Instead, it was the power imbalance and erosion of dignity that automation technology led to that caused most frustration. In fact, Luddites were primarily concerned with negotiating the employment conditions that we take for granted today — you could almost call Luddites visionaries! The Luddites were not opposed to the idea of using machines to increase efficiency and productivity — they simply believed that some of the additional profits these efficiencies led to should go back to ensuring the welfare of workers in the form of pensions, minimum wages and safe working conditions.

Regardless of whether you agree with the Luddites’ behaviour or beliefs, it is the context of this uprising and its parallels with the modern age that offer an important lesson as we begin considering the automation-driven disruptions that lie ahead.

The late 1700s were, after all, a time of significant upheaval in the English textile business. War with France had resulted in trade barriers that had a huge commercial impact on British manufacturers. Added to this, fashions had rapidly changed and men no longer wore leggings — opting for trousers instead. All of this culminated in a time of enormous cost pressure for wealthy textile manufacturers. In this perfect storm of upheaval, steam-powered looms came onto the scene offering sizeable productivity and efficiency gains for mill owners. It was the perfect recipe for a clash.3

The attraction of automation

Looking at the context we find ourselves in currently, the parallels are striking. Facing mounting pressure to decrease costs and increase productivity, businesses today are again looking to widescale automation as the answer. What’s significant about this first of the four forms of disruption we explore in part I is that automation is both a result of change and a driver of it. In other words, many of the shifts we’ve seen in recent years have left businesses with little choice but to automate. However, this in turn is going to kick off a wave of disruption that will re-shape entire business sectors and potentially leave untold millions out of work.

Automation is both a result of change and a driver of it.

This era we are about to enter is one that the World Economic Forum’s founder, Klaus Schwab, has labelled the ‘Fourth Industrial Revolution’.

While many of us refer to the ‘Industrial Revolution’ as if it were a single period of technological and social upheaval, Schwab suggests that there have actually been four distinct industrial revolutions that have brought us to the point where we find ourselves today:

∞

First Industrial Revolution (1760–1840).

This first phase of industrialisation saw society move from muscle power to machine power. It was this transition that gave rise to the Luddite movement as mechanical production became increasingly mainstream. Railroads were constructed as the invention of the steam engine transformed productivity forever.

∞

Second Industrial Revolution (late 1800s – early 1900s).

This second phase of industrialisation saw the introduction of electricity and the development of the production line, which made mass production possible.

∞

Third Industrial Revolution (late 1960 – early 2000s).

Sometimes referred to as the digital or computer revolution, this age of information technology catalysed development of mainframes, personal computing and the Internet. Knowledge became ubiquitous, the tyranny of distance all but disappeared and digital business platforms transformed the basis of commerce.

∞

Fourth Industrial Revolution (early 2000s onward).

Building on the digital revolution, this fourth phase of industrialisation has seen mobile Internet, the proliferation of smaller and more powerful sensors, nanotechnology and learning algorithms bring the physical and digital worlds together.

What Schwab refers to as ‘the Fourth Industrial Revolution’, MIT professors Erik Brynjolfsson and Andrew McAfee refer to as ‘the Second Machine Age’ and others have labelled ‘Industry 4.0’.4

Regardless of which label you use, any thoughtful analysis of the current state of play in business and society makes it clear that the years to come will be a time of rapid and fundamental change.

Throughout this chapter, we’re going to look at what the coming age of widescale automation is going to mean to a range of different industries and how it will disrupt the status quo in some surprising and extraordinary ways.

To get us underway, let’s briefly look at the two significant enablers of this age of widescale automation, as they offer a number of clues as to how this whole trend is going to play out.

Enabler 1: Ubiquitous data

Data today is more plentiful than ever.

It’s widely accepted that 90 per cent of the world’s data has been created in the past two years5 and Google’s servers alone handle 24 petabytes (equal to 24 million gigabytes) each and every day.6

While a lot of this data is generated in monitoring the mechanical world of turbines, tyre pressure and thermostats, a somewhat creepy amount of it is actually about us as individuals. Consider this: private companies today collect and sell as many as 75 000 individual data points about the average individual consumer.7

The raft of web-enabled devices and sensors churning out this data is often referred to as a trend called ‘the Internet of Things’ and it is a trend that’s only just getting started. It is estimated that by 2020 there will be 50 billion connected devices in use and more than a trillion sensors monitoring every conceivable facet of our lives.8 By 2025, forecasts are that a full 10 per cent of the population will be wearing clothing or reading glasses that are connected to the Internet.9

Owing to its scope and volume, this ‘big data’, as it is often referred to, is transforming the nature of business. Reflecting on this, former GE chairman and CEO Jeff Immelt suggests that every company today is in the software and analytics business — whether they want to be or not.10

IT giant Cisco estimates that the move toward a connected world will increase corporate profits by a massive 21 per cent by the mid 2020s and create $14.4 trillion in value.11 As a case-in-point, they highlight Canada’s oil sector, which is set to enjoy 11 per cent operational cost savings thanks to data-driven insights — savings that equate to more than $100 billion per year.12

Keeping with the oil theme, my friend and fellow futurist Chris Riddell goes as far as to suggest that data will in fact ‘be the oil of twenty-first century — wealth and power will belong to those who can find it, mine it and refine it’.

And he is spot on.

Retailers were one of the first industry groups to recognise the benefits of monitoring the purchasing data of customers in order to identify trends. In the words of former Woolworths CEO Grant O’Brien, ‘Data is the new eyes of the retailer. Without it the shopper is invisible’.

In the agricultural world, data is transforming efficiency and profitability too. Farmers in New Zealand are using technology to take hundreds of measurements per second across a large area — data that allows farmers to distribute dairy cows more effectively for feeding. It also alerts farmers to areas of low production that may need additional fertiliser. This precision-agriculture technology has resulted in a significant increase in farm output.13

How does this all enable the Fourth Industrial Revolution and the era of widescale automation, you ask? Well, the very insights necessary to automate the processes and professions we examine in this chapter are all data-driven. Data is the fuel that will drive the automation machine.

As we will shortly see, the data itself is not what is powerful; rather, it’s what the data enables that counts.

Enabler 2: Artificial intelligence

For many of us, the very mention of artificial intelligence (AI) conjures up futuristic notions of Skynet and the malevolent robots that rose up to destroy humankind in the Terminator film series.

In reality, however, artificial intelligence is already here and it’s not out to kill us — well, not yet, anyway. Our computers are smarter than most of us realise and they’re getting smarter all the time.

I had an eerie moment of this realisation recently when searching my iPhone camera roll for some photos of a trip to the Cotswolds in the UK a few years ago. I opened up the search bar and started typing the word C-o-t-s-w but only got up to the third letter when an album of images popped up featuring me and my heavily-pregnant wife assembling a cot for our soon-to-be-born son, Max.

What made the hairs stand up on the back of my neck was the fact that I had never given these photos a caption or category that could have indicated the content of the image. My phone had somehow ‘inspected’ the image and identified that it indeed featured a cot.

I quickly discovered that my phone was far from unique or special in its ability. In the weeks that followed I noticed that Facebook had begun recognising the faces of friends in the photos I was about to post without me having to manually tag them. The AI-driven technology that underpins this somewhat unnerving development has achieved an astonishing degree of accuracy in recent years. For instance, the error rate of image recognising software fell from more than 30 per cent in 2010 to roughly 4 per cent in 2016 — a figure that is especially amazing when you consider that the album used in the accuracy tests included several million photographs of common, obscure or downright weird images.14 Facebook’s own face recognition software can correctly identify the faces of individuals in images 97.25 per cent of the time — a degree of accuracy only marginally lower than our 97.53 per cent strike rate as humans.15

The capability we call ‘artificial intelligence’ today is actually older than most of us would assume. Researchers first started experimenting with computers that thought for themselves back in the late 1940s. They called it ‘deep learning’.16

By the late 1950s, industry pioneers Herbert Simon, Marvin Minsky, Claude Shannon and John McCarthy developed a computer program called a ‘general problem solver’, which was designed to solve any logic problem. It was in fact one of these pioneers, John McCarthy, who first coined the term ‘artificial intelligence’.17

From the very outset, predictions about the promise and potential of AI have proven to be ambitious. In 1957 Herbert Simon boldly predicted that computers would beat humans at chess within 10 years. In reality this feat took four times as long to accomplish, but it did eventually happen when, on 11 May 1997, an IBM computer called Deep Blue beat the world chess champion Garry Kasparov.18

The AI spectrum

When we talk about artificial intelligence (or learning algorithms, deep learning or machine learning, as it is sometimes labelled), it’s important to clarify that it exists in various forms across a wide spectrum.

For the purposes of our discussions here, we’re going to discuss AI in terms of three broad categories19:

Artificial Narrow Intelligence (ANI).

A long way from the sort of rudimentary AI that beat chess players in the late 1990s, ANI is ‘narrow’ only because it is specialised to the function for which it has been developed. Just because ANI has a limited scope does not mean it’s of limited potency or significance. As we will shortly see, much of the technology running our smartphones, online purchases and social media apps is in fact ANI.

Artificial General Intelligence (AGI).

This second level of AI is where things get even more interesting. AGI is generally referred to as ‘human-level AI’, because it describes the capacity of a computer that is as smart as a human across the board — a point often referred to as ‘Singularity’. This is the stage where computers possess the ability to plan, reason, problem-solve and comprehend abstract and complex ideas. Once we have conquered AGI, computers will possess the power to learn from experiences and develop intelligent conclusions as fast as, or perhaps even faster than, the human brain.

Artificial Super Intelligence (ASI).

Now this is the scary Skynet stuff. ASI is the point at which computers possess an intellectual capacity far greater than that of human beings. Furthermore, they would possess the capacity for social skills and general knowledge that would increase exponentially over time. It is this level of artificial intelligence that worries many of today’s leading thinkers, including Elon Musk, Stephen Hawking and Frank Wilczek.

As you can probably gather, right now we are on the verge of moving beyond the first level of AI, where computers aid and assist us as willing servants, to the point where they will equal our mental capacity and perhaps one day even surpass it.

Achieving AGI will be an extraordinarily complex challenge. It will require computers that are significantly more powerful and nuanced than those we currently possess. However, there is little doubt we will overcome these challenges. And soon.

Just how long it will take to create AGI is a source of much debate. Some, such as Google’s director of engineering and pre-eminent AI expert Ray Kurzweil, believe computers will reach AGI by 2029 (followed by ASI in 2045). In case you are unfamiliar with Kurzweil’s name and reputation, he is definitely someone worth listening to. In addition to being a celebrated inventor, engineer and entrepreneur, Kurzweil has been awarded 20 honorary doctorates as well as the American National Medal of Technology. He has also been inducted into the US Patent Office’s Hall of Fame and Inc. magazine named him the ‘rightful heir’ to Thomas Edison.20 So when Kurzweil makes a prediction about the future of technology, it is worth paying close attention to.

Despite this, many believe that Kurzweil’s forecast and timeline are ambitious at best. When hundreds of the world’s brightest scientific minds were surveyed recently, the average estimate given was that we would pass the AGI threshold by 2040.

Regardless of the timeline, one thing every expert agrees on is this: it is only a matter of time before humans will be outwitted by technology. Reflecting on the significance of this, David Rothkopf points out: ‘There has never been a moment when our species did not possess the most powerful intellectual capacity on the planet’. Rothkopf suggests this distinction is unlikely to survive the twenty-second century.21

AI in everyday life

While the ethics and practicality of AGI are still up for debate, consider the myriad ways you are already benefiting from and using ANI, whether you are aware of it or not:

∞ Virtual assistants, such as Siri or Google Assistant, can not only recognise what you say in natural language but even ascertain context and intent based on your tone of voice and request history.

22

∞ Voice recognition technology already enables you to speak a sentence in one language and have it translated to the listener’s language in real time.

∞ Recommendation algorithms on Pandora or Amazon make intelligent suggestions of products, books or music you may like.

∞ The map software on your phone makes route suggestions based on your previous travel patterns and current traffic conditions.

From a commercial and business perspective, the current capabilities of ANI are extraordinary.

PayPal are using ANI to prevent money laundering while cybersecurity company Deep Instinct are using it to detect malware. JPMorgan Chase introduced a system for reviewing commercial loan contracts, which means work that once took loan officers 360 000 hours is now completed in a few seconds.23

One Brazilian online retailer implemented an ANI system to predict the likelihood of customers clicking on certain advertisements, allowing them to make ad placements more effective, resulting in $125 million in additional revenue.24

Of all the commercial applications of ANI, Google’s recent mapping of the exact location of every business, household and street number in France stands out as especially remarkable. Traditionally a job this enormous would have required hundreds of GPS-enabled humans to manually go suburb to suburb and would have likely taken well over a year. Using ANI, Google was able to program its image-recognition software to trawl through the millions of images in its street view database to identify street numbers. The entire process took less than 60 minutes.25

The impact of automation

When you consider the efficiency, accuracy and productivity gains that automation offers, it’s clear that embracing this technology is irresistible for businesses. The twin enablers of ubiquitous data and AI mean we are on the precipice of a level of automation the eighteenth-century Luddites could scarcely have imagined.

In fact, it’s hard even for us in the present day to conceive the impact that automation will have over the coming years. As Amara’s Law tells us, while we humans can often overestimate the impact of technology in the short term, we tend to wildly underestimate its impact in the long term.

In the coming pages, we’re going to explore how this move towards widescale automation is going to significantly disrupt a range of industries and sectors including:

∞ transportation

∞ retail

∞ personal and professional services

∞ logistics and distribution

∞ medicine

∞ communication.

Transportation

While autonomous cars have received a fair amount of media attention in recent years, it may surprise you to learn that innovating the driver out of the driver’s seat has been something automakers have been working on for a really long time.

While we humans can often overestimate the impact of technology in the short term, we tend to wildly underestimate its impact in the long term.

Back in 1939 at the World’s Fair in New York, General Motors unveiled the concept of radio-guided cars and less than 20 years later they released a test model called the Firebird, which was designed to travel along tracks wired with electrical cables (much the same technology used by cable cars in San Francisco).26

As you can well imagine, these thought bubbles and slightly off-kilter inventions never got traction. However, the notion of self-driving cars is well and truly back on the agenda in a big way because the technology is finally good enough. As processing power has improved, data-generating sensors have become more powerful and less expensive, AI has become functional, and automated cars have become a distinct possibility.

Within a few short years, Google has assembled a functioning autonomous prototype and by the end of 2016 had clocked up a staggering 2 million hours of successful driverless operation on public roads. And Google are far from the only ones who’ve been tinkering with driverless car technology in recent years. Tesla, Volvo, Mercedes, Volkswagen, Audi, Ford, Baidu, Apple and even Intel have been busily working away at autonomous car technology.

How far are driverless cars from being a reality?

And now we stand at a point of critical mass. With automakers across the board all working to create a future where drivers are no longer necessary, just how far away is the reality of a driverless world?

In characteristically ambitious fashion, Tesla founder Elon Musk suggests we will see true autonomous driving available to the public by 2020.27Quartz magazine’s Zack Kanter is equally optimistic, predicting that autonomous cars will be commonplace by 2025 and have a near monopoly by 2030.28

One of the more thorough examinations of how the self-driving age will unfold has been conducted by Tony Seba and James Arbib of the think tank RethinkX. According to Seba and Arbib, autonomous vehicles will be an overnight sensation with disruptive ramifications that will rival those brought by the printing press. They predict that by 2027, 90 per cent of passenger miles in the US each year will be travelled in autonomous vehicles and that many of those vehicles will not be owned by the ‘driver’. Instead, this 90 per cent of travel will be done in driverless Uber-style vehicles, which will make up 60 per cent of the vehicles on the road.29 (Similar forecasts from the Boston Consulting Group predict that Seba and Arbib’s predictions are likely to be spot on.30)

So the bottom line is this: a driverless world is far closer than most of us realise. In fact, it will only be user reluctance or regulator anxiety that prevents driverless cars from hitting our roads even sooner.

Naturally there are those who question the pace and impact of autonomous driving technology. For instance, in November 2016 the head of the National Highway Traffic Safety Administration, Mark Rosekind, suggested that truly autonomous cars are actually a long way off and that for the next 20 to 30 years we’ll see a mixed fleet on public roads with different levels of automation.

Then there are those who suggest that driverless vehicles will never be able to truly replicate the nuances of human judgement on the road. They wonder if driverless cars will ever really be able to understand the intent of a police officer yelling through a bullhorn or process nonverbal cues from other drivers.31

However, even if the predicted timelines regarding driverless cars are out by 5 to 15 years, my own son and certainly his children will likely never get a driver’s licence, much less ever own a car.

From a disruption standpoint, this likely reality is what’s keeping the auto industry awake at night — or at least it should be.

The disruption of a driverless age

Within 25 to 30 years, owning a car could be like owning a horse today — something you do if it’s a passion or hobby, but not as your primary mode of transportation.32 Barclays Capital analyst Brian Johnson has said US vehicle sales will likely decline by 40 per cent by 2040.33

Within 25 to 30 years, owning a car could be like owning a horse today.

Senior analyst with Navigant Research, Sam Abuelsamid, suggests that the greatest opportunity for automakers may well be to establish their own ride-sharing services to rival existing leaders such as Uber and Lyft.34 McKinsey predicted in 2016 that if automakers get it right, on-demand mobility and other new digitally driven services could create up to $US1.5 trillion in new revenue for the automotive industry by 2030.35

Everyday life in an autonomous era

Beyond the commercial changes, The Wall Street Journal’s Christopher Mims offers a compelling insight into what the actual experience of commuting to work may well look like in the post-driver age:

Imagine a world in which hardly anyone owns a car. Instead, most people subscribe to a service for self-driving cars. The service is great. You whip out your circa-2025 smartwatch, which has all but replaced your phone, bark a command and a self-driving car appears from a fleet circulating nearby.36

Sound fantastical? Maybe so. Yet very possible and even probable.

But what about the period of time between now and when you cease to own a car? As the vehicle you own becomes increasingly autonomous in the coming years, what impact will that have on your transport experience?

First, the way you travel will change. Highways will be filled to the brim with cars travelling about a metre apart while going between 100 and 110 kilometres per hour. This will significantly increase the capacity and efficiency of roads.37

Once you arrive at your destination, you’re unlikely to pay to park your driverless car. After all, your vehicle may drop you at the desired destination and then head off to a designated wait area or perhaps even drive home only to return and pick you up when you need it. Even if you do need to pay for parking, your car might look after the process for you once you’ve been dropped off. Brand-new technology developed by TechCrunch Disrupt NY hackathon team Val.ai allows self-driving cars to bid for parking spots that are soon to be vacated by other cars. If the fuel cost of driving around before the parked car’s next pick-up is less than the money that can be made from the sale of the car park, it can accept the bid. The parked car will then leave as the winning vehicle arrives.38

I suspect you’re beginning to see just how significant and unprecedented the disruption posed by autonomous cars will be. The autonomous age will likely see the end of taxi services entirely. A Columbia University study suggested that with a fleet of just 9000 autonomous cars, ride-sharing services such as Uber ‘could replace every taxi cab in New York City and that passengers would wait an average of 36 seconds for a ride that costs about $0.50 per mile’.39 As you would imagine, ride-sharing companies are champing at the bit for driverless car services to become a possibility. Former Uber CEO Travis Kalanick pointed to the enormous cost savings of removing drivers from the ride-sharing equation.40