Futurist Gerd Leonhard Keynote DHL Global Tech Conference 2017

Yes, good morning. It's a great pleasure to be here. What an amazing venue. I went back to the beach last night and had a hard time leaving. But my voice doesn't sound like that because of that, because I've been a little bit having a cold for a few days. So it's been a nice evening, and thanks very much for having me here. As I was listening to the introduction, I've been thinking about what the future holds, And in the last 10 years, I've given, I don't know, almost 1,000 speeches or something. In the last 5 years, I keep getting this question when I speak to people about what is happening with people, with humanity. What's going to happen with us? Because today it seems like everything is about technology. In fact, you could say technology is a driving force of society. And 10 years ago, or 15 years ago, when I was an internet entrepreneur in the US, You know, we were always talking about if we can do something. I started a company like Spotify, a music service, in 1998. Before the iPhone, before 4G. It was a stupid idea, of course, that didn't work. It was way too early. And we were always asking the question, if this works, how would we do this? And today, you know, the question that people ask is not if it works, because you can say that pretty much anything is going to work. Human engineering of human genomes, editing people, language translation, robots that fly, flying taxis, self-flying planes. You can say, okay, maybe 10 years, 15 years, 20 years. So if it all goes, if it's all possible, what's going to happen to us? Because we are not limitless. We have limits, we are human. I wrote this book last year, "Technology vs. Humanity," and I think some of you have gotten a copy. I do have one free copy afterwards if you want it, then let me know. Okay, so we're going to have a discussion later, and I would really like to hear what you think about this. I think we have this huge opportunity to make the best of the future. We are actually at a very interesting place right now. We're at the takeoff point of all these possibilities. We have come to a point where we can safely say that in the next 20 years we may see more changes than the previous 300 years. That includes, for example, energy. We're at the end of the oil and gas period. I mean, if you live in the Middle East, this is a daily discussion. It's obvious we're heading towards a point where solar renewable energy can cover 100% of our needs. 15 years, 20 years, 25 years, not 200 years. We're also getting to the point where machines, computers, are learning what's called cognitive computing. And we're heading to the point roughly in 5, 7, 8 years where the first machine will have the capacity of the human brain. Well, some people would argue that's already here, kind of, and it's just $500 million machine with quantum computing. And then my colleague Ray Kurzweil, who's another futurist, says in 2050, we're going to have one machine that has the capacity of all human brains. Of course, that doesn't mean that it's going to feel or have emotions or understand anything. It's just computation. But still, if we have machines that are this powerful, How are we going to control them? Will they actually be our servants, or will they be our terrible masters? I have a pretty optimistic view of the future. I think we are at the point where we can still determine what that means, where we're going with this, and what it does. Last night, I took some pictures. It came to me that really what we are all about is going to be very difficult to digitize. Yes, you can take pictures, you can create a virtual room, but 2 seconds here with each other provides more information than 2 years in the virtual reality room. And why is that? That is because of the way that we're set up as humans. We communicate on thousands of different channels. Marvin Minsky, who was the founder of artificial intelligence, really, he liked to say that humans exist in the ecosystem of minds. For example, when we meet and we talk, there's more information being conveyed in what you don't say than what you say. Now try to get a computer to understand that. Your computer says, "You said the following, that means the following." It's just zeros and ones. It's binary. Computers don't exist. So, they can do lots of things. For example, IBM Watson can read 1.2 million books per minute. That's quite impressive, yeah. But is that the same as knowledge? Well, it's a certain kind of knowledge. Is IBM Watson going to tell me whether I should have this child or not, if there's a genetic defect, for example? Because it read Wikipedia. So basically, there's a huge thing coming up where we have to think about this convergence of man and machine. So I've been doing this, you know, since roughly 15 years, and a new topic has emerged in this conversation because, you know, of course I do a lot of work in technology. And many of us, if you're from the tech business, you know, we're extremely excited about technology. I'm also very excited. I try everything, you know. But now we're also looking at this topic of saying, well, you know, how can we maintain what we are as humans? Because as humans, we are not really technology. This is a kind of a paradigm question, right? Do you believe that humans are technology? If you go to Silicon Valley, the answer is often yes. We're just fancy software. Or bad wetware, what's called wetware, right? You know, blood, flesh and blood, right? We need upgrades. Maybe that's true, I don't know. Are we enough or are we not? I mean, basically, in my book I call this two different universes of thinking. One is about algorithms and the other one is about androrhythms, which is a word I made up in the book because I couldn't find a good word for this. Androrhythms are really all the things that make us andros, you know, androids, not andros. Feelings, emotion, imagination, intuition, ethics, values, beliefs. You know, if you make a list of this, I did that when I was writing the book, it's approximately 1,000 different words that are human only. Very hard to explain. In fact, the main paradox about computing is that there's so many things that we don't know that we know. They all exist and we don't really know what it is. If you observe a child that's trying to ride a bicycle, I mean, you could explain to the child, "You get on like this, you put your foot like—" You can do all that, but basically the child would figure out how to ride their bicycle for one reason or the other without explanation. So this is a really important distinction. I would submit to you that the future of us is not to become algorithms. Because it would be a reduction of what we are. We're much more than that. I'll tell you in a minute why that is and why I put all that stuff into a book. It's important to realize that today, because technology is changing our lives increasingly fast, and I would say to 95% positive, And I'll tell you why that is. The future is now a mindset, not a time frame. If you don't have a future mindset, it will be very difficult for us to be successful. And I find it makes no difference if you're 15 or 25 or 65 to understand the future and make time for the future. So I get this a lot. The last 6 months have been terrible as far as the future is concerned, right? I mean, Donald Trump hasn't exactly brought up the safety level in the world, right? He just fires everybody who's in his way. So regardless of Donald Trump or Erdogan, the future is better than we think. A lot of people I speak to, they're saying, "Oh God, terrorism and biowarfare and surveillance and what have you, and ex machina and robots killing us." The first thing you want to do when it's about the future is completely ignore what comes out of Hollywood. I mean, it's entertaining to watch all those movies, but it's primarily based on fear. You do not want to go into the future based on fear. That would be a very bad idea. We have to find a nice mix of the two things. If you look at those facts, they have one thing in common. Everything is actually better than we thought, right? Decline of poverty, huge. Education increasing, literacy increasing, child mortality declining, vaccination, democracy, with a few exceptions like Turkey, right? So now we're in a situation where we say, well, you know, if that's the future, what is the next thing? Where are we going for this? Solar energy. We've talked about this for 50 years. Finally, we're at the point where if you invest in oil and gas today, like running a pipeline from Alaska to Mexico, it is a very bad idea. By the time it's done, you won't need it. We're always going to have oil and gas. But today, you know, 84% of energy is oil and gas and coal. In the future, it's going to be 100% renewable. In the not too far away future, 20 years. I mean, the progress on battery technology It's mind-boggling. If you take a look at the startup list of who gets funded, I looked at it again last night, 2,740 companies are funded to revolutionize batteries. I mean, you know, the scientific breakthroughs are mind-boggling. And the other one, genetic engineering. Used to cost millions of dollars to get your DNA analyzed. In roughly a few years, it'll be cheaper to make a phone call— I mean, to do the DNA than to make a phone call. And you know what that means. If all our DNA is analyzed and scanned, we can compare. We can possibly end cancer. I mean, today there's like 20, 30 million people with their DNA analyzed, because it's expensive. It's $1,000. So we're heading into a future where basically what's happening is that we're at the beginning, at the takeoff point of an exponential curve. It's very important to remember this. When I started first on the internet and doing tech stuff, you know, we were in the beginning of the curve. So then you would double 0.01, it would double that to 0.02. It's still nothing. Today, Moore's Law, Metcalfe's Law— Moore's Law is kind of ending when it's about chips, but being replaced by quantum 3D computing. So we've gone from 4 to 8 to 16 in a very short time, depending how you look at it, 12 to 18 months. 7 years to 128. 30 times up the curve, 1 billion. I mean, our world will be so dramatically different, it's hard to imagine. The kids of my kids will never know how to drive a car because they won't have to. They can just speak to the car, it will just go off, right? They won't definitely, they will not know what a CD or DVD is. And they'll be 100 years old on average. We're talking about changes that are huge, fundamental changes of how humans relate to technology. And here's the big difference. You know, in the Industrial Revolution or the internet, technology was outside of us. So we have a steam engine, we can go quicker. We have the internet, we can browse. But today, Technology is going inside of us. Genetic engineering, nanobots in our bloodstream, connecting our brain to the internet. Sounds like science fiction? It's not. Whole different ballgame. So basically what's happening here is that this is a very important thing. Today, technology is 95% positive. Yeah, we have some issues, you know, privacy, surveillance, abuse, Facebook. A minor issue, you know. But most people don't really think about that. I mean, let's be honest, most people say, Technology is great, let's use it, right? So that exists today and we have some minor issues, you know, we're looking at this. But as technology advances exponentially, what would happen with this? Would those issues also advance exponentially? Like, you know, in the US now there's discussion about requiring people from the Schengen countries, from Europe and others, to actually divulge the password to their social media when they enter the US. I would say that qualifies as the devil. It's like, okay, technology makes it possible, but is it a good idea? Probably not. So, now we're in the age of ethics. And I don't mean ethics like religion or any of that stuff. I mean just bottom line things. And here's the difference between ethics and, say, sustainability or CSR, you know, nice to have, parenthesis. We talked about this for a long time. It is not an opportunity, it's not something that we can just talk about, that we are humans. We are humans, right? Humanity is not something that's up for discussion. Environmentalism is, maybe, if you're so inclined. Sustainability is a discussion item, but humanity is not. That's just about us, right? It's about the bottom line. Of who we are. So, a great quote from Potter Stewart saying, "Ethics is knowing the difference between what you have the right or the power to do and what is the right thing to do." So, since most of you are technology companies in this room, you are getting tremendous power every day, more power, because the world runs on technology. If we have the Internet of Things connecting, as Cisco says, roughly 600 billion devices in 7 years, who's responsible? Will technology be like the gun lobby that says, "Oh, you know, it's not the guns that kill people, it's people that kill people." Well, that's quite cheap. That will not work here. We're building these things, they're changing society, they're changing politics, they're changing culture. And we are responsible for what we build. And once we connect our health records, our digital money, our shopping, our cars, our homes, our education, our brain to the internet, I mean, we're going to have to be a little bit careful about what is going on with those connections. Not just a security issue, but also a human issue. So as technology is proceeding, you know, in the years of Steve Jobs, there was one keyword that he was always using. And I had the fortune to meet him once or twice, you know, for about 2 seconds until he told me to get lost. But basically in this order, you know, magic was the keyword for technology for a long time. Magic technology. And we still feel like it's magic. You can be on the beach in Saint-Tropez and WhatsApp your kids in South Africa. It's magic. And you can sell stocks while you're surfing on the beach, if so inclined. So, magic, and then many times it becomes manic, to where we wake up at 3 AM and we have to do a Facebook update. Or we feel naked without the mobile phone. It's kind of a funny thing. These days, sometimes when we go out now, we say, okay, we'll leave the mobile, because that's like going back to nature. I don't know how you feel about that. And sometimes in Asia, when you have dinner somewhere, right, I mean, I am the only person that's actually talking to anybody. Everybody else is working on two tablets at the same time, chatting with some Pokémon in the sky. So in that case, I would say that's clearly toxic. I mean, if we're going to build more relationships with with a screen than we do with people, that is a toxic undertaking. That can't be good for us. Steve Jobs refused to give his kids the iPad. I don't know if you know this. He said it was too good. Too addictive. You would not want to live without it. And lots of tech people actually do that. Sergey from Google, his kids go to a Waldorf school, you know, anthroposophical school where it's not allowed to use screens. That's kind of an interesting thing. So, you know, as long as it's like this, no big deal. We get used to that, we can deal with that. But imagine if the future holds this. Because it's exponential, you know, if we're going to be in an augmented reality room, you know, Facebook just presented their new augmented reality tools, and you can say if this works, you would never want to leave it. It's just so much more exciting. It's like the best drug ever invented. Because, you know, the internet in many ways is the next cigarette already. It's like we're kind of glued onto this. But so that's something we don't want. Not personally, not privately. Let's say you're going to use HR analytics software, human resources. Lots of companies use that now. Analyzing what people do and how much they are worth. And then when it's time to say, well, we have to lose 5 people, let's have the software say who's the most useless person in the company. You know how the software does it? Social media, numbers of emails, when you show up, how often you interact, da da da, you know, superficial stuff. TripAdvisor. I mean, if you only eat what TripAdvisor tells you, you are in deep trouble. Nevertheless, it's a fantastic tool. I just wouldn't let it run my life. So that's two different things, and we have to be careful about that because I think ultimately we have to find a mix because technology can always be abused. So that's not a reason why we shouldn't have it, obviously. So in this world now, we're looking at the convergence of man and machine. New relationships. You know, these kind of apps are everywhere now. We can speak to our computers. Apple Siri, Cortana, Amazon Echo, Google Home, dozens. And within just a few years, we're going to stop typing or downloading apps. We'll just talk. And this is just around the corner because voice recognition is almost there. So in the future, if you're the logistics manager, You just say, "Hey, I've got the following problem, needs to be there, figure it out." And then the bot goes out and talks to another bot and figures out what to do. No web interfaces, no dropdown menus. Intelligent clouds. And of course, we're going to see robots everywhere. I mean, robots will be like WhatsApp. And they'll be infinitely cheaper than they are now. We're going to have robots driving us, robots flying us. Airbus is looking at the possibility of the first airplane that's without a person, without a pilot. I would hope it's only for freight, you know, for the time being. But maybe United could use that, you know, you'd have a beading machine, you know. And of course, now we have robots giving out advice. You know, there's hundreds of companies, you know, these kind of companies that make robots that suggest to you what is in the food, when you should take your pill, and so on and so on. So it's pretty mind-boggling now that the headline of these companies reads all the same thing. It always says, "This is not a robot, it's a friend." I would say that's kind of interesting. If I look at machine as a friend, what is the next step? Maybe I can get married to one. Virtuality. And robots trying to look like humans. So that's really changing our lives. And now natural language processing is the biggest point where that is happening. It's getting close to perfection. Again, this is something we've looked at, I don't know, 50 years. But now it's almost there. I'll show this example because this machine can make a copy of myself. It can actually learn who I am from my speech. And everything you say to Siri or Cortana is saved in the cloud. The machine can actually learn how to speak like you. So if you die, your wife can still have conversations with you. It's extremely useful. But listen to this example. Hey, Don, have you heard about this new technology? Are you speaking about this new algorithm to copy voices? Yes, it is developed by a startup called Lyrebird. This is huge. They can make us say anything now, really anything. The good news is that they will offer the technology to anyone. This is huge. How does their technology work? Hey guys, I think that they use deep learning and artificial neural networks. Hillary is right, and I can tell you that their team is great. I wish them good luck. Well, you can tell it's not Obama and Trump and Hillary, but it's pretty close. So not only can machines understand us, they can also be like us. Again, extremely useful. I'm not meaning this ironically, right? It's useful, but eventually what happens with us? That brings up a key question. What do you think we are? How much do you believe in technology? Do you believe that technology has the answer for everything? I mean, it's funny, you know, when I speak to my friends in California, I lived there for 17 years. Now I live in Switzerland where we don't really believe in technology. But Well, to some degree, but when I speak to my friends in California, it's like, you know, you have an issue, it says, well, we can build something for that, right? But I mean, the reality is, of course, you know, there is no app for happiness. There is no tech that fights terrorism. I mean, there's going to be a few things that we have to do ourselves. And there is no sense in Facebook becoming our government, which is what they want to be. I mean, that is some crazy idea. That's just mind-boggling. How much do you believe in that? How computable are we? This is a key question, because if we're not computable, then you would leave certain things not to be computed. So this really makes a difference in our businesses also, because we should not automate certain things while we should definitely automate others. I mean, somebody making a flight reservation or changing a reservation in the call center, that's 20 million people working in call centers, right? People don't have to do that. I mean, there's not much intrinsic value in changing a reservation. You don't have to be compassionate for the most time, you know, to do that. Machines can do that. So you're going to look at roughly 90% of those people will be out of a job. Because machines are learning how to do this. They're not just learning the language, but they're also learning to understand us, to actually make sense out of our lives. So that's a key question of who do we want to be in the future. Do we want to be smarter, faster, more like a machine? Do we want to be more human or both? Can we be both? I always like to say, I aspire personally for my future not for me to be smarter and quicker. I think I have achieved some of that. Just kidding. But to be more human, that's actually much harder. And if you have kids, you understand there's no point in trying to do this, because every single computer is gearing up to do away with you if you become like them. Today, most computers are stupid. I mean, let's face it. They still can do very limited things. They're getting very smart, but they're not at all like us. In 5 to 7 years, game over. Quantum computing, million times the computing power. There's just no way you're going to compete with a machine that can calculate the entire traffic pattern of the world for the last 34 years. I mean, our brain doesn't work that way. So if you're in technology, your position on this topic defines your organization's future value, because now it's about finding a balance. And you see the big technology companies like Microsoft and others already doing things like the partnership on AI to figure out how to create human value from technology. Until now, it didn't matter because we didn't have enough value in technology to really perfectly do all these things. But in 5 to 7 years, technology can do anything. And then the big question is not how or if, but why and who. Well, who? Right now, the answer is Silicon Valley, right? I'm not saying that badly. It's just because they were the best at— are the best at doing what they were doing. But here's the key question, right? This ultimately— how far would you go when it's about this interface of man and machine? Where would you personally cut the line? If there was a machine, well, a software that would allow your neocortex to connect to the internet, would you use it? And the answer I get from lots of people is, "Of course, I would be superhuman." But it would have a few side effects. It's like, you know, you can say, "Do you want to try this drug? You can have some pretty amazing experiences." It's still not the same as me. And of course, it has certain dangers, as we know. So, wearable computing, the quantified self, prothesis. I mean, think about this for a second. If you had a traffic accident, you lose both legs. Now you can get a prothesis that will be better than your legs. Literally, it's very expensive still, but if you're into climbing, this prothesis will actually make you a master mountain climber. It won't do much else, but it will do that. And now it's the first people who want to have their legs removed to get the prosthesis. Now that is a bizarre twist. Of course, the same technology. How far would we take this? We have machine therapists. I mean, this is not far-fetched, because now in the US there's the first couple of trials for judges that put people back on the street on probation, based on algorithms. The machine says this person should go free now because, I don't know, maybe they tweeted a lot, I don't know, whatever, you know, or they ate their food nicely every day, I don't know. But, and of course, now we can change our age. Big theme in Silicon Valley, the end of dying. Lots and lots of startups looking at improving our age, which I think to a certain degree, of course, would be a good idea, but forever? Turning us into gods. You know, I'm not religious, but I mean, this is a significant challenge. Can everybody be God? If there is a God, can we be like God, all of us? Can we program ourselves to be different? Should we do that? And if we did that, who is in charge? So those are some minor issues, you know, I'll leave you for the rest of the day to struggle with this. But as technology now is moving forward into what I call the mega shifts, this is a big part of my book. It's not just digitization. I mean, that would be easy. We're going into a world that is subject to those 10 trends. Datafication, turning things into data. Cognification. We'll distribute the slides later, by the way, if you want to download the details. But I mean, there's so many things happening. And again, I would say that's For us in this room, 95% powerful and positive because not only do we have entirely new businesses coming, we can also solve really very large global problems. Datafication, cognification, augmentation. If you're a doctor making the rounds in the hospital, if you can wear augmented reality glasses, you become a super doctor basically. But does it mean you would wear the same glasses to have dinner with your wife? Probably not, because it would not be human in that sense. They would be kind of augmented, like a Viagra for the head. So maybe not such a good idea. So the smart city is such a thing. The smart city, global revenues expected from this whole smart city idea is roughly $14 trillion per year. And the smart city is obviously beyond all reproach, something that we would really want for lots of reasons. So these trends are all impacting these kind of possibilities. That brings me to my key point here. One of my key points today is we're looking at a future where all of a sudden we have two realities. This is our current reality: 84% of the world energy, oil, coal, gas. Nuclear. And that's ending because now we're inventing, rapidly inventing things. And the solar industry has been through several waves of ups and downs, as I'm sure you know. But now it's clear panels are 98% cheaper than before. Battery technology exists. We're building the intergrid. It's called the intergrid of energy. Result: the Emir of Dubai Sheikh Mohammed said last November is that the goal is to celebrate the last oil barrel we export. And this is from a country that is probably 150% reliant on oil. I mean, imagine this reality warp, right? And this is everybody's challenge today. We have existing business and then we have new business. So if you're in banking, you know, You're like an oil company here. You know the future isn't going to be people paying $10 to send $100 to America. That's just not going to happen. So now we have a challenge of living in two worlds. As I like to say, business as usual is dead. Because of technology. It just takes longer. So if you're in the banking business, you're regulated. First the media companies. E-commerce, mobile phones, calling, and now things like insurance and financial industries and printing. So I would say it's no longer business as usual, it's pretty much business as unusual. That's why I have the two worlds here, right? So all of a sudden we're facing new possibilities. Tesla said, okay, if we want to be successful, we're going to publish our patents. This is the reverse of every other company in the world, pretty much. Like the pharma industry. Tesla said, take $2.7 billion of our patents and everybody else can use them to develop batteries. So General Motors and Toyota is now using the patents, the trademarks from Tesla for free. Amazon Prime. Amazon launches videos, but instead, like every other company in the world, it does not come to me and says, you know, we've got videos now, you can push here to pay. It says, hey, we got videos now, they're free. I mean, this is— So this is one thing to think about for the future. Be unusual. I mean, this is a key success factor. Do the reverse. Business as unusual is a key for us in the future. Because now we have this wave of change. If you're in this sector here, education, banking, the military, energy, government, food, you're still on the beach of change. You know, the wave of change is coming, and I was part of that first wave. You know, the media companies and telecoms and the e-commerce and all these things, and that wave is rapidly going to sweep over all those industries. I think if we observe what happened in the past, then we can be quicker in responding and thinking about what that means. Uh, here's a quick example of a company that is trying to actually do that in the medical field. [No speech]Well, you get the point, right? If this works, 90% less doctor and hospital visits. Remote diagnosis. There's like 20 companies doing this, one, couple of them in the XPRIZE in the US. It's not easy to do, but this company is promising that if it works, and they're rolling out later this year in China, it will do a remote diagnosis better than a team of 10 doctors. And for 98% less money. So this is really how we are changing the world in a really fast way. And I think we can safely say that as far as people are concerned, anything that can be digitized or automated will be. That's the law of digital Darwinism, basically. I think that's a good thing because there's many things that happen when this happens. The reverse is also true. Anything that cannot be automated or digitized or virtualized becomes much more valuable. Let's think about that for a second. What are our lives about? What we do? I mean, 98% of what we do is very hard to digitize. Relationships, trust, understanding, purpose. So the thing is that if you work like a robot, you will be disintermediated. In America, they like to say if you can describe your job A robot will take it. So our future is to design jobs that are with the human inside, right? That are human only. If you have kids, you have to think about that. Don't let your kids learn anything that is a routine. Bookkeeping, financial advice, driving, fast food. Of course, you don't have to learn fast food. You just do it, I suppose. But these are jobs that are going away, like 50-60% of all jobs. And the good news is, because of all this, we can move up the food chain and create new jobs, and also think about a new definition of work. That won't be easy, because in the meantime, what do we do with people that don't have a job? That's a challenge. But having said that, I think it's much more positive than it looks. And you know, the debate in the last couple of weeks and months about globalization, right? I mean, In the US, they're not even looking at this. They're saying globalization is an issue. It's not. It's over. Automation is the issue. Computers that get smart can automate pretty much anything, literally anything, including being a scientist. I don't know if you had ever heard about cloud biology in the pharma business. Rather than having a lab doing the experiments in the lab, which is costly, takes a long time, You program it in virtual reality in the cloud. And you can run 100 trillion if you want in 4 weeks. Just have to have a big computer. So really what's happening here is that we're moving into the world, into a world where data is truly the new oil. And I've been saying this for 15 years. In 2016, it's finally true. The data economy made $7.8 trillion. And the gas and oil economy was roughly $6 trillion. Data economy means, you know, social media, networking, advertising, search, cloud computing. So data is the new oil, and artificial intelligence is the new electricity. Electricity means most of the data that we're using is useless. We can't do anything with it. It's too big, it's unstructured. 95% of data is not actually being used. Like logistics, right? How much data you have. But then exactly how would you go about that? I mean, the data stream of shipping, for example, I don't know, is probably something like 500 billion sets per day. Put that all together and then artificial intelligence can look at this and run simulations. Now, the most powerful companies in the world, they're no longer on this side of the equation. Oil and banks, they're still there, obviously. They're all in technology. Many of you are here. Consider yourself lucky because basically this is the old paradigm, this is the new paradigm, and this list goes on forever. Most of those other companies down here are starting to be Asian and Chinese. It's a very, very powerful situation. But I tell you this, really what's going to happen here is, you know, you know how regulated oil and gas has been. Well, after a while, didn't really work for a long time, but, or the banking business. Regulation and understanding of how things should be is coming to the sector also. It comes with the power. It's much better for technology companies to self-regulate. You know, Facebook said they're going to hire 3,000 people to fight fake news. Let's see what that does though. Not convinced on this. We have to do something to make that work. And added to this is these two new things, artificial intelligence and machine learning. A quick definition, because most people don't really understand. The terms are very confusing. Machine learning is the science of giving the computers the ability to learn and find insights. Machines that are not programmed. Last year we had Google DeepMind won against the world champion in Go. Go is a Chinese-Korean game, 3.5 trillion possible moves. It's not logic, it's strategy. It was unthinkable a computer could learn how to play Go. But what did it do? It observed hundreds of millions of games, it played simulations, and in move 37 against the world champion in Go, Lee Sedol, the machine made a move that no human would have ever considered. An utterly stupid move, and won all of the games after that. Because the computer figured out that there is another way to win, which a human couldn't have because of the brain capacity. And artificial intelligence is the art of emulating humans. Those two things will have huge impact on logistics, mobility, and transport. Among many other things, of course, we're going to see 3D printing of pretty much anything in 10 years. Does that mean we're gonna have less shipping? Maybe a little bit. We're gonna ship the printers instead, maybe. But of course everything is going virtual, everything is going digital. So you've seen the movie Ex Machina, so I'm gonna quickly talk about thinking machines. A lot of people are worried about thinking machines because it kind of seems like when IBM and other companies are talking about cognitive computing and computers that can think. We thought of ourselves as being intelligent, at times at least, right? Teenagers exempt. But we thought of ourselves as being thinkers. But here's the reality of that, right? Basically, the way it's shaping up, there's 4 different kinds of intelligence. There's 3 human intelligences, and that is intellectual, social, and emotional. Much of this we don't really understand. This is just something that we do, or that we don't. And then there's machine intelligence, which is based on zeros and ones. You know, trillions of them. So it's really important to understand that the machine intelligence is a separate intelligence from us. That comes on top, or underneath, hopefully, of us. That's why we shouldn't fear machines that can think. We should only fear the people that use them wrong for nefarious purposes. So this is really important to realize, I think, ultimately, that our future problem is not going to be that machines will kill us or that robots will take over the world, right? But that we enable the wrong people with this technology, just like any other technology, really. So there's a comparison I sometimes use when I talk about artificial intelligence. And that is the 3D printing. You know, this is a 3D-printed flower. And some people would think it's pretty. I think it's, you know, it's all right. But, you know, bottom line is artificial thinking is kind of like an artificial flower. It is not bad. It has its purpose, but it's definitely not a flower. I mean, you wouldn't believe how many artificial flowers are being not printed but used. It's a huge business. They're handmade, you know, with the textiles and stuff, not printed. Not yet. And they have a huge market. I don't know how many billions, but it's huge. But they're not real flowers. So machines that can think are not real flowers, you know, they're not real thinkers like we do. But nevertheless, they're extremely powerful. We need to use them and put them in the right place, put them in the right context. I think this is really going to be important for our future to realize, because this is where we are going. If you can print tonight, print this out, put it up over your bed. It is computers that can think, artificial intelligence connected to the Internet of Things. That will change every single business in a very, very fast time. And there's tremendous potential for us to do new things that were unheard of. If you're a Netflix user, on-demand video service from Amazon, from Netflix, sorry, or Amazon for that matter. If you use that, then Netflix knows everything about your viewing habits. If you forward, what time you're watching, if you jump around back and forth, and it uses that intelligence to make new TV shows. To basically say this is a good thing, a bad thing, and it uses that intelligence, basically the connectivity that we put in it. So this is what's happening, I think, if you're in a tech business in a nutshell. We used to have different sectors of technology, that artificial intelligence or robotics, and now the future really is that it's all converging. That's based on quantum computing. So basically now we're looking at business models that will be combined entities of all of these. Now you can imagine the tremendous power that you can have if you get this right. And that's what all big companies like Google and Amazon and Cisco and of course the Chinese companies Baidu, Alibaba are aspiring to. So this is something that we have to keep in mind. You know, basically it's a $25 trillion opportunity to make everything smart. Connect everything, make it intelligent, make it efficient. And the Internet of Things is a promise of a new nervous system. Essentially, when we connect everything, then it becomes like a human nervous system and new things become possible. It's a possibility of creating new business models based on things. So sometimes I call this a new meta-intelligence. I mean, you can imagine the possibilities here. Thinking cars, parenthesis, thinking elevators, airplanes. Environmental system. I mean, the potential is mind-boggling, and we can solve very, very large problems— pollution, energy. I mean, imagine a world where we have abundant energy, solar energy, so energy becomes as cheap as Spotify for music, and we are able to connect all the information and create new business models. And we can solve very large global issues— water, logistics, all that stuff. But of course, here there is a challenge. Just the fact that we're connecting everything and optimizing everything, that doesn't mean we should be required to stop being human. Because humans are actually not good at constantly connecting. We can't do that. We can't even multitask. I mean, maybe our 15-year-old kids can, right? But we need to be able to be inefficient, to make up stories, to lie, to make mistakes. I mean, if you went as far as saying, okay, the computer is much better at determining, for example, who should go out of jail or not on probation, that may be true. But what if you take it further? Then you end up in a world that says, well, you know, the humans are always doing the wrong, they're always killing each other, they're always making, you know, They're not doing the right things. Let the computers run politics. Maybe Trump is already an AI. I don't know. I mean, how do we work on this? We have to have the ability to just be human. And that means, for example, to say, you know what, I just can't do anything about this right now. Or I want to be inefficient by design. And that is a clash with technology. So technology should not try You know, as the old story in the Greek myth, mythical world goes on, King Midas, you know the story of King Midas, who was a very powerful king, and then he gets a wish, and his wish is that everything that he touches turns into gold. So he gets his wish, and then he can't eat, he can't drink, because everything is gold. And he dies. If we wish to connect everything, Let's be careful what we wish for. Because when we connect everything, is there any room for us to disconnect? And if we are always connected, we're going to die. I mean, there's been lots of research on Facebook lately. It's really interesting that the most depressed people in the world are the power users of Facebook. I mean, it's interesting. I would say there's nothing wrong with using Facebook, but of course, When it's in overuse, then it's quite clear what would happen. So in this world that we're heading into, the world of the global brain, many of you in this room, your companies are building that global brain. Information, sensors, networks, intelligence, robotics, AI. We can do amazing things there, but clearly this is hell then. You know, it's hell and heaven at the same time. It can do amazing things, or it can do really terrible things. And it does require leadership and stewardship to figure out where we're going with this. So on this chart, you can see the possibilities of technology. The benefits are this way and the dangers are this way. This is from the World Economic Forum. It's quite clear there's two things that are the most powerful, the most beneficial, and the most dangerous. That's the Internet of Things, sensor networks, and machines that can think. In other words, this is not really new. You know, technology is neutral until we use it. We can use nuclear energy to make power, allegedly, or we can make bombs. In fact, the technology is almost the same. So we can use technology to improve human beings, you know, to fight cancer, or we can make super soldiers. Program our kids. So I think there's an ethical imperative now. This is not like the CSR imperative, right? This is a human imperative. There's no discussion that we all want to be human. Some less than others, maybe. But there's an ethical imperative that everything we do with technology has to have a sort of collective use of mankind, right? It has to lead to a positive result. If we don't do that, we're going to be in an arms race. An arms race of artificial intelligence, robotics, geoengineering, and human genome editing. My view is that we're still very much at the beginning of this. And Bruce Schneier, who is a security expert, he says if we don't do this, one day there will be a possibility of just clicking somewhere and killing everyone. I don't think that we're going to head in this world. I think we're, you know, we need to ask this question, you know, who is mission control? Right now, mission control is Silicon Valley. I'm not saying this badly. This is a fact, right? Technology comes from there and now increasingly from China. Now we have to figure out, you know, how can we make this work for us? Microsoft, for example, is working on the European cloud, you know, keep the data in Europe. How exactly would we do this and how we're going to control it? And the other thing is, if we have exponential technology and progress, will this lead to a larger divide? Well, so far it has. Yeah, technology has not been the level playing field that we thought it would be. Inequality increasing. The number one reason for terrorism: inequality. How do we do that? Well, we have to distribute the benefits of technology. If the Internet of Things becomes a reality, should it just be Korea, Denmark, and Switzerland, and the US where this becomes a benefit? We can't do that. We're going to have to give it to those other places. How do we do that? That's not capitalism, that's socialism. So, big discussion on this. But if data is the new oil, do we need similar environmental protection laws? The answer is clearly yes. Nobody wants regulation, right? I'd be the last person to propose regulation on this, because we want innovation, we want transformation, we want to go forward. But we need a framework of a sort. I mean, imagine if we hadn't regulated the oil companies. So self-regulation is obviously a pretty good discussion. The European Commission is working on this because the world's most valuable asset— The Economist last week, you may have read it— is data. And we're going to see wars on data, not on oil. Oil wars are over. So in this world, that's sort of our game. I mean, we have the same cards we've always had. All that murky stuff, beliefs, ephemeral things. It's very hard to actually pinpoint. We don't even know what that is. I mean, if I asked you to describe your ethics to me, it wouldn't be an easy answer. It's funny, the other day I asked a question in the audience and somebody from the audience said, "We want to maximize our profit." I said, "That is not an ethic, I'm sorry." Right? It seems like an interesting, you know. Will we need some sort of an EPA for humanity, a protection agency for humanity? Very likely we need that. Yeah, we need somebody that says, you know, this is possible, we shouldn't be doing it. And this is, I think, also up for technology companies, is to invent this and where it's going. Because, you know, this is the bottom line. This is not— I mean, it's obvious, right? Machines don't have ethics. How would a machine know what I'm not saying? How would a machine understand my values, my concerns, my inefficiencies, my feelings? I think a machine can understand my feelings by monitoring my face. So I would say, "Oh, Gerd, his 62 facial muscles express the following. Gerd seems to be angry." A machine can do that. But can a machine be angry? Well, it doesn't exist. There's no existence. Without existence, you can't be anything. You can just simulate things. So this is really important. Machines don't have ethics, but we must have ethics. If we don't have ethics, we die. Every human society without ethics has died. Or with the wrong ethics, for that matter. The other thing is that, of course, what is important to us is not about code. What is important to us is stuff that's between us. You know, the biggest killer in society today It's not certain habits of food or so. It's loneliness. It's not connecting with others. That's the number one killer in society today. So what is important to us is not binary, is not code. And we are experts in inefficiency. How do we combine that with a business need for efficiency? Well, the answer is Every part should get its worth, right? Find its right place. Should you keep some people that work inefficiently? Absolutely. I mean, artists, for example, by and large have not known to be efficient. But they're a major driver of society. Should we keep politicians? Some of them. They're utterly inefficient. But should we replace them with machines? I think that would be the wrong approach. Because technology is morally neutral until we apply it. And we are going to apply technology everywhere. Absolutely everywhere. So this is an important conversation that we have to have about what that means. Noah Harari, in his new book, Homo Deus, that some of you may know, talks about how there's significant danger that we become useless. In the sense of economically useless, right? Because the machines do all the work. And I think that's not the case. I think ultimately we're going to find a way to rise above this, and I'll show you in a second what that means. But we have those kind of ethical threats, you know. Of course, elections have been rigged by all kinds of social media working. We don't really know how that works. We just know it's done with algorithms. My hunch is that Trump is— this is Trump's biggest chance of impeachment. Comes from that corner, if you can say such a thing even. And we're living in kind of a bubble of media. I mean, the most— the biggest media company in the world, Facebook, keeps on saying that they're not a media company. I mean, 2.1 billion people are on Facebook, and 40% of them get their news on Facebook. And still, they hope they have 10 journalists. That's pathetic. I mean, at least you could take responsibility, right? Having said so, I understand, of course, why that is, right? But, you know, this is a significant issue. We have to put that resource back in. So, part of that environmental change now is happening because very soon we're going to start speaking to machines. And this is a huge shift forward because speaking to machines is something that an 85-year-old person can do, that I could do in several languages. I don't have to use my fingers. Imagine what that would do for logistics, for supply chain, for procurement. You just say to the Google Home or Amazon Echo, I need to figure out how to get this box to Guangzhou. And it goes off and checks 100 million data feeds and talks to other bots and comes back 4 seconds later and has a ticket printed out. That's kind of what we can do today, it's just too expensive. Good morning, guys. Hey, Daddy. Okay, Google. Tell me about my day. Good morning, Alex. Traffic to work is heavy. It is 45 minutes by car. Hey Google, tell me about my day. Good morning, Ross. At 10 AM, you have your first meeting. Great. I'll take the kids. Awesome. Thank you. All right, guys. Grab your bags. Let's go. Chop chop. A bientôt, Papa. It's funny. Every time I hear that jingle jangle Googly music— well, Google's one of my clients, but I say it anyway. I always feel like there's something really wrong with it because the music is so weird, right? It's like there must be some stuff creeping in from the back. One day we're going to wake up and say, Google, find me a new life. What is the purpose of life? And Google will say, well, you know, it's to use Google. But so, you know, this guy's already very happy with his use of Amazon Echo. But so this is what's happening. This is our inevitable future. We're going to move to a future where everything that we do can be aided by some smart machine in the cloud. Whether it's driving or flying or logistics or procurement or travel organization, that's already happening. This is what every tech company is building. And that's not necessarily a bad thing. However, you know, it's kind of— we have to figure out, is it convenient? Is it cool? Is it creepy? It could be both, obviously. I mean, Google Maps is convenient, right? But imagine an app that says, I'm going to go through all your email, and the meaningless people are killed and put in the junk box, right? That could be very convenient because there's a lot of those. But it could also be quite misleading. I mean, imagine if you get a personal email from your son saying that, you know, his girlfriend had a heart attack or something, and then the bot would say, thanks for your message, and at this point I'm not available, and it would just automate that. Big chance for that happening. We may move to a world where we're all praying to the altar of technology if we go in this direction. Especially if we can speak to them, then of course it becomes even more tempting. So we already live in a world where technology is pretty much omnipresent, especially for our kids, where we are kind of growing up with technology in such a way, you know, where we, uh, where technology kind of takes over every piece of our conversation. If you've seen the movies, the TV show Black Mirror, it kind of shows the next step, which is to rate everyone, to constantly be rated, to connect all the time everywhere, to see the data superimposed over people. And that is exactly what Facebook has been proposing. Maybe they watched the TV show and came up with a new business model. So there's significant challenges here. Really, what needs to be happening here is that our future will depend on the wisdom of technology and humanity. Technology is not our enemy, it's not our savior, it's just a tool. The worst thing that can happen to us is if we take technology and make it the purpose of our lives. And even though, of course, that's not the design of technology, but it does look Feasible. So rather than going, you know, bothering with traditional dating and talking to people, I just swipe on Tinder. Boom, I'm done. I get to the result very quickly. And that's not a bad thing, but if that becomes the new normal, what do we have, right? Then it's basically a simulation. So there's something we have to think about. Here's a great example. The recent United Airlines incident. You heard about this. I will not repeat much of it, right? But in a nutshell, 4 people had to be removed for the staff to get on to fly on the plane. Nobody wanted to leave. The computer said, we'll make a lottery to decide who leaves. 3 people left. 1 guy didn't. And of course, this is what happened, right? The guy was forcefully removed from the plane. He was beaten. He lost 2 teeth. Now United is under a major investigation. Lost 7% of market, of stock value over this incident. You know, this whole thing happened because of algorithms. It happened because of technology. The people at the gate were told 4 people have to go, and so they made an announcement, say, hey, $800 for people who want to go on the next flight. Nobody volunteered. What would you have done at the gate if If you had authority, you would say, oh, let's make it $2,000. If it's such a big deal. And they couldn't, because the database would say, no, no, no, no, no, can't do that. So then the computer in its wisdom said, who is the most useless person aboard? Not people like me, right? First class, premium, whatever, worldwide mileage, whatever they call that stuff, right? And of course, they know my social media profile. Every airline does that now. So they figured out if you're worthless based on that stuff. And the most worthless guy was this guy, Vietnamese doctor. I mean, worthless in the sense of data. So they said, let's take those 4 people, they have to go. 3 went, he didn't. And then when he was resisting, the system said, oh, we have resistance, we have a weird guy, we have an incident. Not saying why or anything, calling security automatically. And they came and they didn't know the context, they just beat him. Because it was just another sort of half terrorist, basically. Not knowing the context. Complete mismanagement. Now, one single person at the gate with authority could have said, "No, this is going to really be bad for us, right? Let's not go down this road." Instead, we have this, right? Bored as a doctor, Leave as a patient. And so this is algorithmic management. You do not want to manage your company just by algorithms. You want to manage it with great powerful algorithms and then use human judgment on top and then be allowed to use your human judgment. That's the whole point of it. What is the most important thing for people? It's other people. So yes, that's, I mean, airline systems are notoriously bad, right? I mean, the worst IT in the world, always finding excuses for things not to work, right? So, I mean, I could tell long stories, but I will not. So the bottom line really is the biggest challenge for us is not that machines will take over. I think that is far-fetched. Because machines are so far away from understanding how all that stuff works. And maybe 100 years or 200 years we can worry about that, is that we become like them. I call that machine thinking. If you think that your business is a machine, you are in deep trouble. I mean, this is a whole discussion about efficiency and all these things. I mean, the bottom line is efficiency is not the final destination of a business. You wouldn't believe how many companies I work for, they say, okay, digital transformation, let me figure out how to be more efficient in the company and optimize everything. That's all they want to do. The CFO loves it. Higher margin. I would tell you efficiency is for robots. That's what machines do. That's not the final destination. Happiness is the final destination. Customer happiness is not achieved just with efficiency. Have you heard a customer that says to you, I really love your company because you're so efficient? What's the point of that? I mean, why would they love your company? Because of relationships, trust, brand, purpose, meaning, you know, combination of 100 things. Efficiency is just one of those. Don't be mistaken, digital transformation does not mean we're going to be ultra-efficient and that's the end of the story. When you're ultra-efficient, you become a machine. When you're a machine, you're worthless as a human. You're a commodity, like, like a cellular network. So that's our final destination. This is Martin Seligman, the psychologist. What matters most for us, and this is really important for business, what matters most to people: positivity, engagement, relationships. Meaning accomplishment. It's called PERMA, right, in positive psychology. And that's really how we build new relationships also in the future. I think that's really what it comes down to, what we have to keep in mind. So in this future, what are we searching for when we use technology? Are we searching for this? Yeah, we're searching for that. We're searching for intelligence, you know, for efficiency. But what are you searching for this? We're searching for relationships. And the bottom line is technology is not what we seek. But how we seek. And that, we have to keep that in mind. What do we seek? I mean, of course, technology cannot tell us what the purpose of life is, right? But at the same time, I think this is a very big distinction, very important for us to keep that in mind when we think about how we're going to talk about the future. Marc Andreessen, one of the most famous people in Silicon Valley, said this in 2011: software is eating the world. And it's so true, right? Everything has become software. Music, films, television, books, cars, transportation. Banking is becoming software. And when things become software, they get to be ultra ridiculously cheap. So when 3D printing comes and we can print engine parts, you think they're going to cost the same than before? Unlikely. So the bottom line is, however, culture still eats technology for breakfast. So we're living in a dualistic world where we have to take care of this because that is really ultimately what drives revenues and efficiency and possibilities. And then we have to realize that everything else we do is actually not that. The reason that you have great customers, they love you, is because of culture, because because of relationships. So basically, if we look at that future, you can safely say that humanity and technology is our future. Humanity on top of technology. And for that, we're going to have to spend a similar amount of time and investment on humanity than we spend on technology. So the next few years, you'll see things like a global digital ethics council. A non-proliferation agreement on artificial intelligence. And we have those things already. It's going to be very hard to figure out how not to inhibit technology, but to make it useful and to set the right priorities. So in this world, you know, just talking briefly about your own future, very important to keep in mind what's our own future as people. Well, quite clearly, in the world of Pepper and cohorts, you know, And that is only— the total peak of this is only 5 to 7 years away. Well, it's all going to be done by either cloud or by machines, smart machines. So this is our emotional quotient. That's our future. That's what machines will never know about. Emotional intelligence. If you look at the World Economic Forum priorities for the next couple of years in terms of skills, Critical thinking. Well, that's why you're here, right? Creativity. And of course, emotional intelligence. That wasn't even on the chart 5 years ago. In other words, 10 years ago, we were asked to work like robots because that's what, you know, robots were bad. 10 years from now, we're going to be more human. Otherwise, we won't be there. Our future is to become more human, not less. In the world of technology. Because this is how humans work. Daniel Kahneman, the Nobel Prize-winning psychologist, he said that we don't actually think with the brain, we think with the body. If you've seen the movie Her, some of you may have seen the movie Her, you know, where you fall in love with the operating system. The problem was that she didn't have a body. And that was a tiny problem for the guy, right, in the end, because it turns out that she was having sex with 3,400 other people at the same time. Because she didn't have a body, you know, so it was kind of doable. So Moravec said, whatever is simple for a human is hard for a computer, and the other way around. Let's keep that in mind when we think about how we're going to use technology. Let's give the computers the jobs that are simple for them, because we can never beat them. We will never ever beat a computer at data. But let's not give them the jobs that are simple for us, which is to decide things, to understand. So, our technology is forcing us to merge our business models into this. As I was saying in the beginning, this is the hotspot in business to take a holistic view. Which means sometimes it will cost more. Because it is, you know, people are expensive. If you just go for the lowest common denominator, you will not have a single person working for you. So this is ultimately where we go on taking a holistic view to include the externalities. This is a big deal in environmental control. In our business model, to include what is outside of our current affairs and create a holistic model. And it requires leadership. You know, right now we're at 90% heaven. Most of technology is so positive that we're really excited about this. We don't want to be in 10 years at 50/50. And how would that happen? Well, we have to collaborate to figure out how we create leadership there and how to keep human things human. So Steve Jobs, I end with this. He said something very important. He said this, I think, 15 years ago. Technology alone is not enough. It's technology married with liberal arts, married with the humanities, that makes the results. I think this is crucial for us to remember. This is table stakes. This is not something we can say, let's have dinner first and then we'll talk about ethics, right? As Bertolt Brecht once said. I take what Steve Jobs said in one of his speeches. I'm going to convert a little bit, right? He said, stay hungry, stay foolish. And I'm going to say, stay hungry, stay human. And I think that would be a very good summary of our conversations. And finally, you know, in this old Star Trek scenario, we have technology and we have humanity. So my wish for you is to embrace technology, but don't become it. I think that is where the future can go. Thanks for your time and live long and prosper.