In the ‘future’ will your job be secure? For those in the insurance, healthcare, legal and a range of other sectors, it probably isn’t, says Edelman Digital’s Gavin Coombes.
Forget being a doctor or a lawyer. In the not too distant future, a robot will be able to do these jobs – and do them even better than a human.
This was the main theme of ‘Future Shock’, a presentation from Gavin Coombes, president, Asia Pacific, Middle East & Africa, Edelman Digital, at ClickZ Live Hong Kong.
The term ‘Future Shock’ was first coined by American writer and futurist Alvin Toffler in the ’70s. He defined it as the point when technological innovation, or change in general, reaches such a pace that it’s almost too overwhelming for people to deal with.
“We are living in a time where various forms of technologies are maturing on their own, but maturing and converging in parallel. And it eclipses the age of the Internet’s coming of age 10-15 years ago,” says Coombes.
This goes beyond ‘business model’ disruption like Uber. The real threat to businesses is the threat of being ‘Kodaked’, he says.
Being ‘Kodaked’ has become synonymous with a giant corporation’s lack of vision when it comes to developing strategy for imminent change. Kodak failed to embrace digital camera technology – out of concern it would cannibalize its profitable photographic film and printing business. But since 1998, Kodak’s work force has dropped 97% from 170,000 employees to 6,500 today.
It joins Blockbuster and Blackberry, two other giant corporations which failed to recognize the threat of digital disruption to their businesses. For Blackberry, not recognizing the threat of the iPhone. For Blockbuster, digital video streaming and Netflix.
“It seems to be when you become a market leader you (Read more...) inherently blind to the disruptors coming behind you,” says Coombes.
The rapidly accelerating post-industrial, post-internet age
Artificial intelligence (AI) is today’s digital photography, says Coombes.
“Like digital photography, AI has been around for 30 years. People have been afraid of it, people have made fun of it, people have made movies about it. But we are at the point now where AI is going to stop being funny,” he says.
As AI converges with 3D printing, big data, blockchain and a number of other technologies, a new, post-industrial age is beginning and almost every industry will be affected.
For example, here’s how AI deployment in the automotive industry will affect the advertising, real estate, insurance and fossil fuel sectors:
By 2020 self-driving cars will either be on the way to becoming mainstream, or will already be mainstream in certain cities. “It is an unstoppable technology because there is a profit motive to correct them,” says Coombes.
A decline in car sales has already begun. Coombes predicts a mergence of traditional car companies, and consolidations to survive but not all of them will. It will be a process of ‘managed decline’, he says.
Advertising and media
Its ramifications will be felt wide and far. Auto companies are some of the world’s biggest advertising and media spenders, so when the auto industry starts to fall over, the advertising and media industry will suffer too.
“There may be entire agencies and holding companies that may completely fall by the way side,” says Coombes.
Car premiums, which underpin the insurance sector, will also suffer. Currently, human drivers have a fatality rate of about 1:100,000 kilometers.
A self-driving car will throw those odds into the wind with the fatality rate decreasing to 1:10 million kilometers, says Coombes. As a result, auto premiums are expected to fall by a factor of 100.
Disruption to the real estate industry (as a result of disruption to the auto sector) is already visible on the American West Coast. A lot of big technology companies are in Mountain View, California or Palo Alto.
But younger workers, millennials in particular, prefer to live in San Francisco. As a result, Google, Apple and Facebook use Wi-Fi-enabled buses to shuttle people from San Francisco to their place of work.
These are early examples of how a Wi-Fi-enabled self-driving car will enable employees to live further and further away from their place of work as it becomes an extension of their office, says Coombes.
“Cities will become more pedestrianized and city carparks could be turned into parks,” he says.
All these self-driving cars will be primarily electric. For the first time, 2015 saw more new capital invested in solar power than in fossil fuel extraction. We can expect this trend to continue because there is a profit motive, Coombes says.
“This is all as a result of not artificial intelligence but one single deployment of AI in the automotive industry. It’s not the bomb, it’s the blast radius,” he says.
Pattern recognition versus problem solving
Artificial intelligence relies on pattern recognition. This is the art of harnessing huge amounts of data to find commonalities between different points of information, says Coombes.
And this is where the revolution happens. A white collar professional might think their job is safe from AI. However, only those of us with jobs focused on problem solving, rather than pattern recognition, can feel safe about future career prospects, he says.
Legal work is both cognitive and involves the scouring of documents to find small bits of information. Machines, bots, AI – that are specially targeted to the legal industry are already able to do this to a point of 90% accuracy, says Coombes. While the best lawyer can only achieve 70%.
Health care industry
In the health care sector, a machine can already recognize cancer in an x-ray with an accuracy of 90%, versus the best nurse, at 70%,” says Coombes.
(Coombes says this 70/90 ratio of human versus machine pattern recognition is a generally accepted ratio, which is widely quoted across the industry.)
IBM’s Watson – one of the most advanced examples of AI – is already being used by hospitals in the U.S., says Coombes. Watson can find cancer at a rate of effectiveness four times greater than the best nurse.
In the future, Coombes says a hospital will combine bedside nurses, high-end doctors, surgeons, and machines.
For example, once a breathalizer is attached to a mobile phone, people will be able to begin diagnosing themselves before they get to hospital. A hospital run by AI will then be able to diagnose them even better.
How will AI make the world better?
The world will be healthier
As a result of all this, healthcare will be more affordable and reach more people, making the world a healthier place.
The world will be fairer
If current legal cases don’t get pursued because people can’t afford a lawyer or the lawyer isn’t very good, AI will change this. An AI law firm or a machine programmed to do law will be able to do it more effectively, and cheaper.
The world will be better fed
Traditional farming techniques will not be able to feed the anticipated 9 billion people who will inhabit the earth by 2050.
GM food will be one solution. Another is agroponic technology – which takes plants and grows them indoors stacked hundreds of meters high. A technology already being used in regions with little arable land. Synthetic food will also see us eating affordable synthetic meats once price points come down.
The world will become more honest
The Moodies app is just one example of how AI will be used to better decipher human emotions. This app is currently available in app stores and reads moods using voice analysis. Once this technology becomes more highly evolved it will be possible to tell if people are lying or not, says Coombes.
Where are the industries for growth?
There are some surprising industries for growth, says Coombes. These include farming, banking and manufacturing.
He predicts that a high-tech farm, an agroponic farm, or a farm being done by machines, will start flourishing like a dotcom in 1999.
Financial services is one of the lowest ranked sectors on Edelman’s trust barometer, and has been since the 2008 financial crisis. It suggests therefore, that trust will be the biggest impediment to adoption of new digital banking technologies.
*Source: Edelman Trust Barometer, 2016 (Global Results)
People might be prepared to pay with PayPal, but they may not be prepared to store their life savings or their mortgage with it, says Coombes.
However blockchain, the encryption technology that allows for the transfer of virtual crypto currencies such as Bitcoin, could change that and the industry continues to monitor it carefully.
Manufacturing faces one of the greatest threats from disruption from new technologies such as 3D printing. Those businesses prepared to re-engineer whole supply chains have the most chance of surviving, says Coombes.
The next generation Nike might for example, could be just an app that allows a person to scan their foot, go onto their phone, scroll through all the designs, or customize one, and then 3D print it.
If Nike goes down this path, it will involve doing what Kodak didn’t – walking away from its entire supply chain with a totally different company, says Coombes. But to do this requires a certain shift in mindset.
“The corporations of tomorrow won’t be corporations as we know it. They will be platforms. They won’t be the sum total of their physical infrastructure but the sum total of their intellectual capital,” says Coombes.
The hard reality is there will be no point hanging on to mid-level law clerks or diagnostic nurses because only a few will be needed as the machines will do the rest, he adds.
How would you create a faster, leaner more nimble version of your current business? Takeaway all of the physical infrastructure and focus on what is the intellectual capital, advises Coombes.
The upside is that these new technologies will allow brands to better talk to the individual customer on an individual basis, says Coombes.
“In a big data age, in a 3D printing age, an AI age, you can actually talk to your customers in an economically viable manner,” says Coombes. And we can expect this to all start happening within the next three to four years.
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