As the SARS-CoV-2 pandemic transforms businesses across the world, futurist Gerd Leonhard identifies opportunities for start-ups in the next normal. He outlines his vision in “Futurizing your Business: Renaissance from the Age of Digitalization” at HKTDC Entrepreneur Day (E-Day).
How will business change in the new reality?
Leonhard predicts there will not be a post-pandemic return to normality and the next normal will be very different.
10 Game Changers
- Big data is the new oil.
- IoT means connected everything.
- Computing power makes quantum leap.
- Machine learning adapts to change.
- Produce anywhere with (3D) printing.
- Virtual reality expands scope of media.
- Cooperative ecosystems replace EGOsystems.
- Digital ethics become critical moving forward.
- Transactions join communications.
- Employees who act like robots will be out of work.
Employees who act like robots will soon find themselves out of work. Gerd Leonhard, Futurist
The SARS-CoV-2 pandemic has brought significant changes across all businesses sectors, Cruise liners went into suspended animation while entertainment transformed with innovations like drive-in concerts.
The world is undergoing a Great Transformation, with four “bigs” playing a leading role – Big Tech, Big Media, Big State and Big Health. The result will be “Hellven” — it could be Heaven or Hell depending on how it is handled. The future presents utter uncertainty and businesses needed to abandon traditional, pre-pandemic ways of doing things and adopt a VUCA – volatility, uncertainty, complexity and ambiguity.
V – volatility
U – uncertainty
C – complexity
A – ambiguity
Technologies are developing extremely fast, the pandemic is accelerating the trend and there are ample new technologies and ideas “lying around” at present.
“Only a crisis – actual or perceived – produces real change. When that crisis occurs, the actions that are taken depend on the ideas that are lying around.” Milton Friedman
The crisis and technological potential will drive extremely rapid, disruptive change with more progress over the next decade than the world has seen over the previous three centuries. Computers are expected computers to match many human capabilities as early as 2027, with questions as to whether if humans are ready for the future shock such changes will bring.
10 game changers
Ten game changers will shape developments over the coming decade and the pandemic has accelerated these changes. “It’s as if you pressed the warp button and we go off to change land.”
“It’s as if you pressed the warp button and we go off to change land.”
The first game changer will be “data everything”. With data the as “new oil”, businesses need to have the numbers in hand to go forward. “Lots of start-ups in Hong Kong and all over the world are dealing with data.”
“Lots of start-ups in Hong Kong and all over the world are dealing with data.”
This leads to the second – “cloud everything”, since vast amounts of data will call for copious, storage space. The next game-changer will be “connected everything” – through the internet of things (IoT) not just everyone but everything be it appliance or vehicle, will be connected through the internet.
Another game changer will be “compute everything – quantum computers will increase the computing power available by many orders of magnitude compared with the classic machines working today. The fifth game changer will be “understand anything” – natural language processing will let mankind speak to machines as if they were humans. “I can say ‘fix the focus on this video’ and it will just know what to do.”
“Smart anything” will be a further game changer as machine learning greatly increases the ability of machines and systems to adapt to change. “Transactions” will join “communications” as a game changer, and blockchain technologies greatly expand the scope for, and reliability of, transactions.
Another game changer which has great relevance to all merchandise traders is the distribution of production. Improvements in the scope and quality of three-dimensional (3D) printing mean items can be produced anywhere. “We will be able to print anything from our tennis shoes to our wrist watches.” This is already happening in the medical industry, with printing of such components as kneecaps and ear lobes.
Massive increases in the power of media technologies will expand the scope of media offerings, letting people of the future “see everything” through such technologies as virtual reality. Work-from-home has given this phenomenon a big boost, while improvements in genetic engineering made it possible to change anything – which has massive ethical implications.
The world will move from EGO-systems, where an individual or small group controls everything, to ecosystems, where cooperation is key.
A concern many people have about the future is automation and the rise of robots removing many jobs. As roboticist and artificial intelligence authority Hans Peter Moravec says, what is easy for computers is hard for humans, and vice versa. Employment involving routine, easily reproduced tasks will be automated while those needing unique, human responses will grow. Employees who act like robots will soon find themselves out of work.
Employees who act like robots will soon find themselves out of work.
Digital ethics will become critical going forward – whether it is those developing artificial intelligence (AI) applications considering the consequences of their inventions, or social media platforms changing their policy of ignoring harmful content. Technology is morally neutral until used, and ethics needed to become a layer within applications, opined the futurist.
Work from home
Addressing the topical issue of work-from-home, panelist Karena Belin, CEO and Co-founder of Hong Kong start-up community WHub, expects it will lead to a cultural shift within companies. A key issue will be motivation – what drives people to login from home? Purpose-driven companies will do well in a work-from-home setup. One change that has already taken place is a universal acceptance of virtual conferencing – which the panel members themselves were taking part in. “No one will argue against a virtual conference now.”
No one will argue against a virtual conference now.
Toa Charm, Associate Professor of Practice of Business at the Chinese University of Hong Kong Business School, predicts digital, virtual connections greatly increase the potential for entrepreneurs, since the most successful start-ups have a diverse team, in that they were drawn from many parts of the world. Many Hong Kong start-ups began with a set of fellow-students but drawing team members from abroad will let them open up regional markets and build a diverse team, leveraging talents from outside.
Many Hong Kong start-ups began with a set of fellow-students but drawing team members from abroad will let them open up regional markets and build a diverse team, leveraging talents from outside
Herbert Chia, Venture Partner at Sequoia Capital China. says the switch to virtual meetings has greatly increased efficiency. Less time and resources are wasted flying to other cities for meetings or conferences, everyone can simply log in from their desks within seconds. However, work-from-home means staff need to be more disciplined and engaged in their work.
Mr Leonhard believes physical presence still has a place with work-from-home and the office leading to a hybrid model.
“You could watch 100 hours of video on the Mumbai night market but within just two seconds of actually being there, your perceptions will be radically different.”
Looking ahead and considering resource allocation, Mr Leonhard points out that the oil and gas sector has a huge impact on climate change and employs just 10 million people. Conversely the renewable and nuclear energy sectors could employ 100 million people and benefit the climate. He sees a sea shift in investment from fossil fuels to renewables and many start-ups will operate in this area.
Prof Charm says the COVID-19 crisis will bring golden opportunities for start-ups since many firms are investing heavily in technology as pandemic-associated changes, such as consumers staying away from shopping malls, disrupt established business models.
Watch see the full presentation here.