DOTS 2017 Futurist Keynote Speaker Gerd Leonhard Keynote On Digital Transformation And The Future

Okay. Dobriden. Hello. Nice trailer, huh? Okay. It's really a great pleasure to be here. You are very patient because it's been a long morning and I want to thank you for sticking around. It's really a great pleasure to be here today to talk to you about the future. You know, it's very important for me to point out that as a futurist, I don't predict the future. There's no such thing. There were some people who could do this. Isaac Asimov, Arthur C. Clarke. What I do is I observe the future. In China they say, if you want to know about the future, ask your children. So all you have to know is really to listen to find out what that future is. Because what I'm about to tell you may scare you a little bit. It's very important to understand the future. I wrote a book four months ago. It's called Technology versus Humanity. And if you go out after the event, if you fill out the feedback form, you get a free copy of the book. I wrote this book because in the last five years I do about 100 speeches a year. And every time I was speaking somewhere, talking to business people and governments around the world, I got one single question every time after my talk is what is going to happen to people? What's going to happen to humans? Because technology is now capable of doing pretty much anything, like quite literally anything. Technology is now at the place where we're at an exponential curve of change. And that basically means that we're no longer living in the linear world. You know about Moore's law and Metcalfe's law and all these things. But basically what we're seeing now is a mind boggling change. We're at 4, we're at the takeoff point of the curve. And now science fiction is becoming science fact. Look what happened to the publishing industry. Who's making all the money on digital advertising is Google and Facebook. 92% of digital advertising. Exponential change. If you look at what's happening with electric battery vehicles, very soon, I think in less than 10 years, nobody will buy a car with a gas engine. Well, some people will still do that for other reasons. But think about that. When this happens, think about what happens with energy. In terms of solar energy. We're on the way to clean energy. 20 years. In 20 years we're going to be able to supply the world's energy needs with solar and renewable energy. And we've talked about this for 50 years. Didn't happen. But finally it's here. Artificial intelligence computers that can Think. Look, we're pretty much at zero now. In a few years, billions of dollars made with artificial intelligence, of course, a huge business, the exponential scale. So first, very important to keep on thinking linear is extremely dangerous. Chances are your business in five years will be entirely different. In 10 years it could be the reverse of your current business. It's very important to keep that in mind when you talk about transformation. The rule is what I call the Hemingway rule. This is taken from a Hemingway book. Gradually, then suddenly. That's how change is happening. First we see nothing like the paperless office. Remember Napster and downloading of music. And I used to be in the music business. Not much happened for 10 years. But today a hundred million people are paying for services like Spotify. 100 million. Gradually, then suddenly. So if you're in the insurance business, the banking business, government, oil, energy, mining, whatever, nothing much happens until it's ready and it just takes off like a firecracker. One thing is for sure, the future is not an extension of the present. You have to look no further than the German car business. You know, I was, I was born in Germany, but I live in Switzerland now and I spent 15 years in the US so I have three hearts, so to speak. But the German car business is a great example. What happened here is that the future of the car industry is not about cars, it's about mobility. Imagine the painful shift when you've made cars for 30 years and now you're going to make mobility offers. Car sharing, electric cars, autonomous vehicles, flying cars, flying taxis. That is a fundamental change. That's like saying a cow is going to behave like a chicken or something. It's entirely the other way around. And this is a huge shift we're seeing here. For example, Mercedes Benz vans. One of my clients that I speak for quite a bit, they just launched a new van called the advance concept. And this van has a drone on top of the. And it dispenses robots in the back to deliver while the driver is delivering. And the driver doesn't actually put stuff in the van anymore. The whole concept is a concept of experience, of service, not of selling units. Huge shift in terms of business model. So that's something we have to get used to. In the music business, where I had the misfortune to work for 10 years when I worked in the music business, the number one thing was to say, well, if people would stop downloading for free and not paying us, we could save the music business. Turns out, completely wrong idea. Look at this slide. Do you see what's happening here after the valley of death, which was a few years ago, 74% decline of revenues in music. Now it's growing like crazy. But who are the new music companies? They're not the record labels, they're not Sony, EMI, Bertelsman. They're Spotify and YouTube and Baidu and Facebook and probably some Chinese companies. It's a tough business. But here's the lesson you can learn from the music business. If you don't react, the future will look bright, but you won't be part of it. It's very important to realize this transformation is not the same as innovation. Today in the music business, you're not selling music. Music is free. How much are you guys? Are you using Spotify? Anybody? Spotify? Yeah, I love Spotify. Great concept music like water. Spotify has 21 million songs for 8 or €10. You know, we used to pay €20 for one CD. That's clearly a bad deal if you're looking at a per unit cost or income. But completely different business model. As Marshall McLuhan said, it's the framework that changes with technology, not the picture. So looking at what Satya presented earlier, it's a perfect frame for this. Our world is changing in the logic and the emotions and the values, the ethics, not just some social media marketing or some cloud that you use. That's a much larger story that we have to keep in mind. We have to check our assumptions. What does it mean? Where are we going with this? Robotics are going to change our world, take our jobs. We're going to see, of course, the first flying taxi here in Dubai. I advise you not to try that. But they actually want to roll it out very soon. Here's a computer system that can face scan your face while you're getting investment advice called Enviso. Very scary. Already happening on Facebook in the background, the drone delivery, the bot that goes down the sidewalk is being trialled in Virginia now, as of last week. And this, of course, is in Redwood City, delivering things on the sidewalk. And here, of course, the ubiquitous intelligent digital assistant. In the near future, we aren't going to type, we aren't going to bring up the browser. We're going to have millions of these in different shapes and we're going to say, hey, book me a ticket to go to this cool event in Prague. And then I want to buy a book from Gerd and it will just go off and do it or we'll do pretty much anything for us. So that's going to be a world dramatically different. Science Fiction becoming science fact. Don't think for a moment, if you're a scientist, then you know about how this happens. Like artificial intelligence. We had four waves of artificial intelligence. Didn't mean anything. Total over promise, total disaster, no delivery, no result. Now all of a sudden, it's different. Just because it wasn't right 10 years ago doesn't mean it won't be right in two years. It's very important to remember. It's the context that it changes. So what we're seeing here is that we need to think about the world that works like it does today. And then we need to think about a world that will work differently tomorrow, what it might be. Energy is a great example. 84% of the world's energy is covered with nuclear, a little bit, mostly coal, gas and oil. And that's our history. 84%. Do you really believe in 20 years we're going to have 70% covered by oil and gas? I mean, OPEC says that, of course, right? What else are they going to say? Reality is clear. Every single state that's depending on oil wants to get out. Saudi Arabia has a transition plan to oil. I don't know what that means. Probably flying taxes, I guess, or golf. Hard to say. But this future is certain. So if you're in the banking business, digital money, the blockchain, digital distribution, 90% cheaper services, just like Spotify is a certainty. You can be an oil company, say, oh, you know what won't happen? Because we have a lot of lobbying. That's a science. This is definitely happening. It's a hard future. What might happen tomorrow, you see here, Amazon has a great service, they called Amazon Go, that's being trialed. You just walk into the Amazon store and you walk out with whatever you got. You don't actually. It's like Uber, right? You just hop in, hop out, and the payment happens in the cloud. It's going to be difficult to figure out how people wouldn't steal stuff. Airbnb has a new channel called Experiences. They don't just rent places anymore, they rent people. So you can go fishing with somebody, or you can go to Burning man with a group of people or whatever you have in mind what might be tomorrow. Very important. So in this future, clearly we're heading to a future where I like to say it's very important that your ability to think from the future is more important than to think about the future. So if I ask you today, what is going to happen in five years, do you have an answer? What's going to Happen to your life, your kid's life, your business, your government may be tough question. Lots of things will happen to government. But five years, you have to have an answer for that. If not, start thinking. Because we have to really think about that determines our success. Genetic engineering, if you're in the medical business, that's not five years, that's 15 years, 20 years. But it is happening. We're going to be able to solve cancer, so some kinds of cancer, or Prevent it within 20, 25 years. Huge societal issue. We're going to be able to get older. Longevity. There's companies in San Francisco, of course, where else saying that they want to end to dying, the end of death. Now this is not something that we would ever think about here in Europe. This is Silicon Valley and of course China. But the reality is the machines are coming. I tell you one, let's not be afraid of it, let's be worried about it, but let's not be afraid about it. Because the worst thing you can do is to watch science fiction movies and think about the future, with the exception of maybe her and Blade Runner. So we need to move into the future without fear, but with caution with we have to think about what could happen, what we need to do to keep it positive, to keep our control over humanity. And the mega shifts that I talk about in my book, you'll see that there's only 10 of them. I will not bore you with all of them. Suffice to say, when I talk to companies, they're always saying about digital transformation. Digital transformation is as useless as social media. It's just to take whatever problem you have and that's digital transformation. You take whatever software you don't understand and that's artificial intelligence. Here's what's important. Personalization, Datafication. Everything is becoming data. Everything including us. Cognification, Machines that can think. Kevin Kelly writes in his book about cognitive computing. Cognitive machines, automation. 50% of our jobs will be automated in the near future. 15 years. That's good and bad, depending how you look at it. If you have kids, don't let them learn anything that can be automated. Any routine, gone. I think that's good news, but I'll talk about it a little bit more later. And of course we have augmentation, hologram, hololens as we saw earlier. Fantastic new possibility. Virtualization, robotization. If you understand these 10 trends, then you're pretty safe for the future because you can invent and think about what the next step would be. As always with technology, this is about balance. There will be no future where we can say, let's go back on technology. Let's not use mobile devices, let's not use the cloud, it's not safe. Let's not use the cloud because it's Americans and the NSA listening or whatever. Those are concerns that we all have, but we have to address them. We cannot go back with technology. What we have to do is find a balance. And here's the balance. It's the balance between humans and machines. That's what we have to find. I'd like to do a question to you. Do you believe that humans are fancy machines? Are we machines that are just like machines? Like these, just a lot better. Anybody? It's okay, you can. I figured. Oh, there's one answer. Okay, good, thanks. We'll have to talk afterwards. Now you will not get my book. Just kidding. Thanks for the, thanks for the vote there. But that's the key question, right? What are we, where are we going with this? Are we just this, right? I mean this is a new thing in Silicon Valley and in China. Artificial intelligence, which means machines that do human things, is the new electricity. And I think it's true. This is the biggest change in business and in our lives. Machines that can think, but not at all like we think. There's a big difference. How do we think? If I meet you later? It takes less than one second for us when we meet to exchange important information about who we are and whether we're going to go further without saying a single word. We're communicating on a thousand channels. And you could argue that all of those channels are data channels. Maybe that's true. But you know, computer has one channel, it has zeros and ones and it can read IBM. Watson for example, can read a million books a minute. That's a pretty amazing channel that we should use. But ultimately, where are we going with this? Convergence of man and machine is years, not decades. Literally years. The so called singularity. The point of convergence of man and machine. 7, 8, 10 years, some people say earlier. Nothing to worry about if we go about it the right way. And this is of course a key question. This is the wave of change we're seeing today. Right now, the car industry is on top of the wave. Music, business, e commerce and so on. Already in the wave and on the beach are many of you. Insurance, government, military, health, energy. Learn from the music business. You deny this change, you'll end up not being part of the future. Nobody will care who Sony Music is in five years unless they really dramatically change how they Go approach this. So this feature is basically happening in a digital environment and changing everything else. You see all the things that we see in the newspaper lately, machines that can read thoughts, the computers that are faster than machines. JP Morgan software replaces 350,000 hours worth of lawyers. Any lawyers in the room? Let's see if that's true. Right? The relentless pace of automation. Yet here is the bottom line. We are years, decades, centuries away from machines thinking like humans. And that is a good thing. We don't need that. We need machines to think like they think. Let machines read a million books, let them read a trillion data streams. That's useful for us because we can't. Great analogy here. I read the other day, artificial intelligence has the same relationship to intelligence, human intelligence, as artificial flowers have to flowers. In other words, machine intelligence is a completely different kind of intelligence. An artificial flower isn't a bad flower, it just isn't real. So we can do something with those flowers. I think we can do a lot of things with those. But Daniel Kahneman says, well, world renowned psychologist, Nobel Prize winner, he says cognition is embodied. We think with the body, not the brain. It's very important. How do you think? How do you make decisions? How do your customers trust you? How do you build relationships? Do you do that with a database? You use a database in CRM and ERP and what have you and whatever you want to use to maintain. But you build a relationship between people. We shouldn't have a machine decide who is a worthy relationship partner, who we're going to marry, what children we have, who we fire. So called HR analytics. Very, very important point to think about where this is going for us and what our future is in the workplace. So in this world, there's two sides that we need to invest in first. One is the side of algorithms, big data sensors, the Internet of things, liquid business, all the things that were talked about before. Because without that we can't be competitive. But make no mistake about this, efficiency is for robots. We pursue efficiency now because we're still so inefficient. And that's a good thing to do. Don't stop doing that. But efficiency isn't the purpose of business. What is the purpose of business? What's the purpose of life? Well, obviously, happiness. Simply put, the purpose of business is to make the customer happy. Do you make the customer happy if you're efficient? Will the customer say, I really like these guys, they're so efficient. Come on. They're so optimized. They have so few people working there because they have great technology. Come on. What really counts for us is what I call the andro rhythms. You know, the human things. Andro, not algo human things. Trust, relationship, creativity, intuition, design, imagination, empathy, compassion, friendship. The list is a thousand words long. That's why we're all successful. But let's make no mistake about that either we need both, we have to invest in both. In fact, I think if we have a business devoid of people, then we have a huge issue. This is called the Moravec paradox, which is very interesting. Keep that in mind when you're thinking about machines and smart software. Moravec said, whatever is very simple for a human is very hard for a computer. Whatever is very hard for human is simple for a computer. And that's how we're going to use technology. We don't want technology to replicate us. Even if that would be possible, it would be very difficult. Even if you believe that people are machines, it will be a while before we figure this out, before we know where to go. So now we have intelligent digital systems like Amazon Echo and Google Home and Cortana and others. We can speak to them. The future of computing has no interface, as you've seen earlier. We're going to sit down and say, hey, I need a good day tonight. No, just kidding. We're going to say, hey, I need this ERP package to be fixed and it just goes off and does it. Or books a travel trip for me somewhere takes me to a place to where we can figure out where we're going to take the next step. Right. Basically take a dive into our brain. These machines are digital copies of us. Is that a good thing or a bad thing? You decide. If these machines weren't a copy of us, they wouldn't be able to do the work. One sentence you speak into Cortana or Siri or any others allows the system to identify you on a huge number of data. Just one sentence, not typed but spoken. There's people who love it. Like this guy loves Echo, loves his computer friend. There's other people who would be more worried about this. You know, where it's going and how we can do this. We may very soon forget what it was like not to speak to computers. Anybody here in this room still buy CDs? You know, the round plastic things? You buy a CD for your kids for Christmas, they will call a therapist. We have literally forgotten what it was like. It's just a click now. The same thing is going to happen here. This is a very important part in our future. How far should we take this? Should we get intelligence to fix us? Should we have therapists that are artificial intelligence? Should we have judges? There's a first trial going on in America that an artificial intelligence is going to decide if somebody gets out of jail or not, and they have a higher rate of approval than the judge. Is that a good thing? Is that dehumanizing? I mean, these are big questions. We're going to go into this world, right? This is the global brain. This is not Skynet. This is actually a good thing. This is what Microsoft and companies like Microsoft are building for us to use. This is what they have to build so that we can make it liquid and efficient. This is extremely powerful. Imagine if this really works. It's no longer just the mobile. So now we have endless data, we have endless connectivity. We have to think about. Maybe this is augmentation automation, what's called application, which is to give control to the system. That last part we don't really want. I'm delighted to hear that Microsoft, for example, has a cloud in Germany now because it gives us a little bit more of control. You have to ask this question. Who is mission control for humanity? Who controls the fate of technology? Well, the answer is. You know what the answer is, right? It's not us, it's Silicon Valley. Is that a good thing or a bad thing? I'll leave that open for discussion. China is next in line. Clearly we're going to have to figure out where this going. You know, how we can live in a world that takes care of the magic of technology. That's what we want. We want technology to be magic. This is what we've always done ever since we invented fire or the wheel or the steam engine. So today it's this, right? I would say 30% manic, like Facebook posting in the middle of the night, 10% toxic. When you're having dinner with your kids and they're all playing on tablets, that's toxic, polluting us. And as technology goes up the exponential curve, we don't want this to grow like this, right? We don't want that because we're talking about a world that would be so connected. My money, my car, my health records, my government, my logistics, my smart city. Just take anything and put smart and AI in front of it. Then you have the future. In this future, we want that to be magic and not manic or not toxic. That's for sure. This future is what I call hell. Then it's hell and heaven. Very important for us because we're all in the technology Business in some way or the other. We, we need to make sure we use the benefit without getting too much of the disadvantage. It's like an oil company takes the oil out, should be responsible for pollution, should be. We have to figure out how we make this possible, because this is our future. Here's our cards. These are the cards of humanity that we've had for tens of thousands of years. Beliefs, morals, ethics, not religion. Different story, Basic humanity, ethics. And here are the cards of technology. What we need here is a balance, is to figure out how we can be fruitful, as Will Gibson said. WILLIAM GIBSON SCIENCE FICTION WRITER Technology is more neutral until we apply it. Does that mean we shouldn't apply it? Well, that's not really an option unless you want to move to Amish country or the mountains of Switzerland, maybe not even there anymore. It comes down to this, right? We're in the age of digital ethics. You decide what is good, what is bad. Does it have value? Does it build trust? The only question that matters to your business does this build trust and value? Not profit and growth. That comes after trust and value. So here's a key question that we're posing. What should be automated and what should not be automated? Should a Telecom company fire 90% of the staff? Because now we have robots and automation, and if they can do that, do they keep the money? Or as Bill Gates said, do we have a robot tax? Is that capitalist or robotax? I'm not sure. Can we be capitalist? Here's a simple answer on this. Ethics is knowing the difference between what you have a right to do and what is the right thing to do. This is the key question of technology, the question I talk about in my book. So going forward, this is what's going to happen to us. Anything that can be digitized, automated, virtualized, robotized, is going to be. So at the music business, people did not want music to move to the cloud. Now we're in the cloud. Paperless office is here. Cloud computing is here. Pretty soon, blockchain will be here. And the worse is also true. Anything that cannot be digitized or automated becomes extremely valuable. And that, ladies and gentlemen, that's us, hopefully. Let's not remove that because we have so much technology that we remove what we are, which is not technology. I mean, I believe that we are technology in some fancy way, maybe, yes, but we're human. We're completely different than a machine. We have to find the platform for both of those things. We shouldn't just invest in becoming smarter, but become more human. Your future is first becoming smarter and more efficient, because that's what we're doing now. And then after you do that, you have to become human again. That's where the value of things is between us. So very important. Put the human back in sight of technology. That's the relationship you have with the customers again. Nobody will love you for being efficient. So I'll skip this one because I have to wrap up. The biggest danger in the future is not that machines will kill us or take over or will move to Mars because machines have taken over the world. The biggest danger is that we become like them, that we become like machines, that we become useless humans, as Homo deus in the book is proclaiming, I don't think we're going to be useless humans. I think we're going to find a way forward to combine those two things, to combine the things of technology and humanity. Because this is really what's happening. Technology is exponential, but humans are linear. And that's good. Let's exploit that. Let's see where that is going to take us. To summarize, very important. Understand the mega shifts, especially cognification, datafication, anticipation. I will publish the slides later on my blog. You can download the whole thing. But basically there's a short, small chart that I use called megashifts dot com. You can watch the videos on that as well. That is sort of the bottom line. It's humanity with and on top of technology. That's our future. That is something we have to think about, how we're going to realize it, how we're going to get a recipe for the future. So last night, as I was doing the Final Touch, as always, I got inspired by the city. So here's a quick summary. Right? Data. Intelligence, humanity. That's our recipe for the future. In detail. Connectivity. Sensors, network. Internet of things. Intelligence. Very important. Emotional intelligence. That's us. Artificial intelligence, the machine. Social intelligence, the government, maybe, and human intelligence. And this is what matters to us. This is the cocktail for the future. If you want to take this as a summary, I'd be delighted. I will make this slide available. I want to leave you with two bottom lines. First, embrace technology. Embrace, but don't become it. There's a very big difference here. I think it's very important to keep this. The second one is, as my mentor, David Bowie said once, in this future, the future belongs to those that can hear it coming. And I hope you can hear it coming a little bit more now. I wish you all the best luck in the future. Thanks for listening.