Gerd Leonhard, CEO of The Futures Agency, Keynote at Coronation Funds Annual Conference In Capetown

Sawubona, good morning. It's really great to be here. You know, when I was a musician, I actually played in an African highlife band, a juju band, as they call it, a highlife band. It was a great experience playing with musicians from Ghana, from Nigeria, from South Africa. I got to meet Fela Kuti when I was a musician, so I have a strong connection to Africa, especially South Africa, even though, of course, Fela was Nigerian, but never mind. Thanks very much for having me. It's a great pleasure. First, I want to say that it's very important to realize that the future is already here. It's just unevenly distributed. That's what my colleague William Gibson says, who is a science fiction writer. That actually means that what is already happening is that the future has already arrived, and we just didn't notice. In China, they say, "If you want to know about the future, ask your children," because they are busy doing those things that we perceive as being science fiction. 25% of American kids are already using voice control to send email, to talk to each other, and to order stuff online, which means they don't type, they don't download apps, they speak into whatever and say, "Please, two train tickets to Chicago." And that already works, it's just that we don't really know about it, right? It's a cultural thing, not so much an age thing. Most kids now, millennials that are mid-20s, don't bother with a driving license. That's probably different in this country because of the distances and stuff, right? But in most major cities, that's about 300 major cities around the world, there's a clear trend towards not touching a car as a driver. So the kids of my kids will never know how to drive a car. They'll probably never know what a book looks like because it's all electronic and screens. They may refuse to learn languages because the machine does it for them. I don't know if you've tried this before. There's fantastic apps that I use all the time because I travel a lot. One is called SayHi. This app costs $2, translates in real time to 35 languages. So it's pretty mind-boggling. Of course, you can't do intimate philosophical conversations, right? But the other day, had a great half-hour conversation with the sushi chef in Japan, speaking about things like global warming and those kind of things. He spoke in Japanese, I spoke in German. So that is a real, I mean, that's all happening all around us. And if you're in the business of investing, if you're investing your money, you've got to be aware of the fact that the world is changing at exponential pace. In other words, what was true yesterday may no longer be true tomorrow, or maybe partially true, or not at all. And this really makes for a volatile environment, but those that understand the future will understand what to do and where to invest. Take a simple example. All of us know we're nearing the end of oil. Most of us don't want to realize this if you have investments in oil companies, right? But that's a scientific fact. It's about 20 years. ETA, 20 years. Solar energy has become 97% cheaper, solar panels. The main problem is, of course, we can't transport the energy. We don't have the batteries. You can do it here, but you can't use it in Norway. That's an issue. But if you're aware of that, you would know basically the end of oil is definitive. That's really important about false signs. It's important about things that you do. I do actually do 4 things as a futurist. I don't predict. Forget that prediction of investment. There's no such thing, as all the other speakers have already said. There's no such thing as predicting the future. There's only observation. What I do, first point, I observe what is happening around me. I pay attention to that. I try to understand. This, by the way, is the only human skill we will have left in 10 years that sets us apart from computers. Computers can do all these things. You can ask computers today about the, let's say, the currency trends of the rand versus the dollar in 10 years. They will give you an answer. In 5 years, we'll have a computer that will have the capacity of the human brain. That event is called the singularity. In 10 years, people are estimating maybe 15 years, we'll have one computer with the capacity of all human brains. That's 10 billion brains then. That's a scary thought. But the computer will never understand what it means to exist. The German word Dasein, which you may understand, is existence. Computer can do anything. IBM Watson machine, which is the most advanced cognitive thinking machine, can read a million books in one minute. But does it know what the sense of the book is? Can it connect the context? That's a completely different question. One is information, the other was understanding. So when you think about your future, don't think so much about information or knowledge. Knowledge is a commodity. It's good to have, but it's about understanding. And when you're an investor, you have to understand stuff. That's completely different. I can understand you within 1 second that we meet outside in the hallway later. It takes a human being 1 second to understand the other being without saying a thing. We form our opinion about the other person in 1 second. We don't really know how that works. So it's very important to understand that humans don't make decisions based on rational facts, as you can see with Trump. I'm just kidding. But we make decisions in different ways. So the third thing I do is I imagine the future. And this is sort of the most important aspect of this, is to say, well, I'm going to travel 5 to 7 years, not 50 years, that's impossible, maybe 10 years, and I come back with the future. That's what I do for my clients. I travel to the future and I bring them back what I found. which they could do very easily. They don't have time. It's very important to imagine that. The next one is to develop foresight. You know, we're now going on a technological race, some would say an arms race of technology. Artificial intelligence, genome editing, cognitive computing, the Internet of Things. Most people don't really know what all those things are, but I'll explain. That basically means that the speed is like warp drive. You've seen Star Trek. Is they can push the button and— When we go warp drive, there's no way that we can keep on looking backwards. It's like, you know, try to go on the German Autobahn when you visit Germany. You're going 220 kilometers an hour and there's a guy behind you, you know, flashing. You can't look back in the mirror for like more than a split of a second. You crash, right? So it's very important to develop foresight when you're think about what you're going to do in financial matters, but pretty much everywhere else too. Sir Francis Bacon once said, "If we try to predict our future with certainty, we end in doubt. If we start with doubt, we may end with certainty." So embrace the doubt, because right now, God knows there's a lot of doubt now. It's much better than to start and say, "I have the certain answers." Also, I think I want to point out a couple of facts about the future being better than we think. You know, it's amazing these days how many people are afraid of the future, think of the future as a dark place. It's also because of the Hollywood motion pictures, you know, Ex Machina, and we're going to be killed by the robots. That's entertainment. Most of it is not very good. The fact is the future is actually looking a lot better than it ever has. Again, apart from Trump. We won't touch on that. His curve is hopefully going down as well. So we have a decline in poverty that's mind-boggling worldwide. We have a decline in infant mortality rate. We have a total decline in genetic analysis of your DNA. It used to cost $1 million to do DNA. Now it's $800. In 2 years, it'll be $100, and eventually it'll be $2. And anybody can have their DNA analyzed, and then we can do something with that. What we can do with that, different question. Life expectancy exploding. We're gaining 1/3 of a year in Western countries. All of us are gaining 1/3 of a year. Just by being there. The kids of my kids will get to live to be 100 by default, 120. Imagine what that will do for retirement. 60 years of retirement, fantastic. I can go to Cape Town and hang out forever. The eternal swallow. Other things, of course, global population is not growing as quickly as we thought it would. We're going to keep growing, but it's declining in overall growth rate. Not as disastrous as we thought. Most important, energy. 20 years away from being able to cover our energy needs with solar energy. Which basically means it will be free, pretty much free. Just like music, you know, if you now used to be in the music business, if you're using Spotify— have some Spotify users here, right? Spotify? Yeah, you can nod, it's okay. It's not illegal. In fact, you're paying, right? It's a league. So Spotify, now you're paying what, $10, which is, what is that, 150 rand, right? Something like that, for 21 million songs. It's basically free for the song. So it's a very powerful thing what's happening to us. And I like to say that humanity will change more in the next 20 years than the previous 300 years. Here's an illustration that is really interesting by the guys who invented this thing called Hyperloop. You may have heard about Hyperloop. This is a transportation system where you don't go in the train, you jump into like a box a coffin, you would say, but you jump into that, and then you're transported from San Francisco to Los Angeles in 32 minutes once it's built. This is coming to Dubai, it's coming to Slovenia. This is a mock-up. That's going to be available. I mean, this is actually faster than a plane, because you don't have to— you just hop in. It's like 19 minutes from Abu Dhabi to Dubai. This is now becoming reality. It's mind-blowing. You can see that on YouTube, but it's, of course, at this point a mock-up. But quite clearly, humanity and technology, man and machine, woman and machine, are converging. And that is both scary as well as quite powerful. Imagine what we can do with that. We can end diseases. If you're into investing, this is a huge, huge thing, right? Basically fighting disease with technology, not with pills. The end of what we know as medication. We're not going to take these statins and cholesterol pills in 10 years. We'll have technology to deal with that. So that's a fantastic future that we're seeing there. We're going to be able to talk to robots. Some people will be very friendly with robots. Some people will fall in love with their robots. You've seen the movie Her. And we're building relationships with screens, which is a very strange thing. In fact, you could say most people have more interaction with their screens than they have with people. Probably not a good idea. And then we get really excited about technology doing our work, right? This is the self-driving car, which people thought was science fiction. The guy is very proud of himself driving there. But it really only works in San Francisco, for several reasons. I drove the other day, it was pretty mind-boggling being in a traffic jam for 3 hours in Los Angeles. You're always in a traffic jam. So you can do your emails or eat a sandwich or something. But beyond that, I wouldn't go on the German Autobahn with that. So warp drive into the future. I think it's from Absa. It's an app where you can do banking through WhatsApp. This is kind of like all that stuff looks like science fiction. Now you have personal advisors in banks that are machines. I mean, not like this, but you call them, right? I mean, you can in fact talk to them like it was a person. Every single bank in the world is investing in this, and that basically means firing all the low-level financial advisors. Well, you know, if you're going to invest $10,000 and you want the facts, you can get that from a bot, right? I mean, that's really trivial. That's like saying you're going to change your reservation or something, right? So that's happening everywhere. And it's basically this whole idea of saying, you know, the industrial revolution, what they call the fourth industrial revolution, cyber-physical systems. Now every industry is connecting all their stuff to the internet. Logistics, for example, you can save 40% of your cost by connecting everything in a network. Huge amount of possibilities there. Science fiction is increasingly becoming science fact. Think about that when you look at an investment opportunity and say, "Ah, I know that. Just pie in the sky." There is some pie in the sky, like going to Mars and settling there, or beating cancer. That's 20, 30 years away, but it's not that far out. In overall terms. So it's really an art of realizing this. Most importantly is this curve today, the exponential curve. This is really interesting because, you know, humans are obviously not exponential. When we count, we count 1, 2, 3, 4, 5. And the exponential curve, you know, Moore's Law, Metcalfe's Law, 1, 2, 4, 8, 16, doubling every 18 months, sometimes 12 months, and halving in price That's what technology does. The power in this mobile phone I have here, this is the power of a mainframe computer that served the President of the US 20 years ago. There's more power in this thing than the computer 20 years ago. In 10 years, this thing will have a million times the power, and you won't charge the battery for 2 weeks. Think about that exponential curve. That's because technology is doubling power, getting cheaper. Things are being invented all the time, things that used to be impossible. And here's the key point, right? We're at the pivot point. Consider yourself lucky. 10 years ago, if you invested in technology, we were still down here. So you invest in the paperless office, and it still didn't come, right? It's barely here now. It was too early. So when you double 0.01, you get 0.02. It's still nothing. So now we're here, and consider yourself very lucky. Now you get to invest for the next 5 years with the viewpoint of that exponential, because after 5 years, you get into the vertical takeoff on the curve. That means the sky is the limit, basically. I mean, in 5 to 7 years, you can ask a question, if technology can do something, the question will always be yes. Because, well, today we have restrictions, you know. We don't have quantum computing, we don't have enough power, we don't have enough internet, especially in Africa. Yes, okay, those are all restrictions, but in 5 to 7 years, gone. 8 billion people connected to the internet. Ubiquitous access to balloons and drones, and not from the likes of Vodacom and MTN only, but for everyone. So that curve is just accelerating. So that also brings us a world, you know, when you think about what we're currently going through, that has been referred to as VUCA in the military, right? Volatility, uncertainty, complexity, and ambiguity. All the good things. I'm telling you, that's not going to change. That is the future. That's our default operating system. Especially what I heard about politics in South Africa, right? So That is a VUCA world. It's volatile, it's ambiguous, we don't know what to think, we have to think on the fly, we have to be fast, we have to respond. So we're looking at a world where we don't just have to innovate, we have to transform. I mean, this is a complete difference. Innovation means tomorrow I'm going to use a different machine, or you can email me faster, or whatever. Transformation means I'm not going to use the machine. I'm just going to speak. So every business has to transform. If you're a bank, you know what's happening. This technology makes you dispensable. I mean, M-Pesa in Africa already covers most of the mobile transactions. I'm not sure about South Africa, but in general, the banks are looking at basically losing 50 to 60% of their low-hanging fruit revenues worldwide because of transformation. So if you're in the car business, you know, the biggest transformation that nobody wanted to realize 5 years ago: self-driving cars, autonomous cars, electric cars, car sharing, not having a car. That's today. So think about that if you're a car company. If you're not transforming, you're going to die. I mean, the German car companies are saying, oh, this is really bad for us because People are not going to buy a car in the same way that we did. That's a fact. So that means you have to transform. Imagine if you're a company that makes clutches. Well, parts, parts, those cars don't have clutches. The electric cars don't have clutches. They have an automated clutch. It's software. It's like 2 or 3 pieces, not 2,000. You're dead. Not needed. Like a record label, you know, or a publisher. Just kidding. So we're moving into a world that we're saying that things used to be normal, linear, and now they are basically always exponential. If you don't understand that, don't invest. Because that's the bottom line. In 5 years, we're going to be in a completely different world. In 10 years, you can't even imagine. That's why you need advice, to understand the exponential factor. But I recommend 5% of your time should be spent in the future, looking at stuff that other people are already doing, because you're always saying, of course, especially in Africa, saying it's going to take much longer, da-da-da. But that's actually not true. It has taken longer until now. But now we're on the exponential curve. Things are really dramatically changing. Look at digital in South Africa. The numbers are already pretty astounding. I find a penetration of 50%. That's pretty high, but we have a long way to go to make it work better. But think of this exponentially, 5 to 7 years, 100%. Well, 90%, that would be enough. That's quite astounding. So in many ways, you could safely say the future is no longer an extension of the present. And take a company like Walmart. We work a little bit with Walmart, and the CEO of Walmart announced last year— you know Walmart, the big retailer, they have 2.2 million employees worldwide, mind-boggling— and they made for the first time a new decision saying, we're not going to open 200 new stores every year, we're going to put that money into digital. That's called pivoting, making a different decision from your past. So I can guarantee you, if a company can't pivot, like airlines, hotel companies, or countries, you get stuck with an old business model, you become irrelevant. I mean, Walmart has become kind of irrelevant compared to Amazon. I mean, look at the Amazon growth curve, it's like this, right? And Walmart is like, you know, So that has to be fixed. Those kind of things are really important. So we have constant transformation. Here's a map of those transforming trends, and we'll distribute the PDF after the event so you can take a good look. But it's a little bit like, you know, if you look at all these things, you could work 150% just on those trends. But just to pinpoint a few of them, you know, there's the obvious ones that we've known in the past. There's a couple new ones like cognitive systems and The Internet of Things and the blockchain and drones and all that kind of stuff. If you want to be a savvy investor, you should stay on top of these megatrends, mega shifts as I call them. We'll go into detail on the next couple slides. So these waves of disruption are coming, and I would submit to you they're actually quite positive, except that disruption is always a little bit bothersome. When I worked in the music business, The record companies, in their wisdom, realized that if people could get to the music for free, that they weren't willing to pay the same price. So what did they say? They said, "Well, it's a bad thing, so we're going to sue everyone that downloads for free." Remember Napster? I don't know if you've ever been sued, but my son was sued as a— well, this was just an accident, I suppose, but 257,000 people were sued for copyright infringement, for downloading music, in 10 years. And in the meantime, the revenues of the record companies went down 74%, because they couldn't understand how to respond to it. They just figured that old things should be kept. Not true. So now in this wave of transformation, we have the car companies in the very top, music, e-commerce, mobile already in that wave, and on the beach waiting to be transformed. The juicy fruits for your investments: education, banking, energy, insurance, government. Same thing. If you want to know what's going to happen to all those industries, look at music and publishing, transportation. There are some advantages, of course: more regulation, more difficult, you know, so it will be a different course, but Here's a key question. When you're looking at a company that is interesting, the question really is, are they indispensable? Are they like oxygen or not? Because if you're not, if you can be dispensed with, you will be dispensed with. That is digital reality. Somebody can do something better than you can, and they could find their way to it, all of a sudden you become meaningless. Look at CDs, right? Anybody still buy CDs? I know, you can admit, but I think if you buy a CD and give it to your kids for Christmas, they will call a therapist, right? Because they are completely off the wall with that. And that means all of a sudden the record companies are no longer like oxygen. It's the internet guys who are like oxygen. That changes business models completely, this intermediation disruption. The music guys have looked at this chart, and we've gone from $40 billion revenues to roughly $11 billion or so. Just a while ago, and now it's coming up by people paying for subscriptions. 100 million people are paying to listen to music. That's 100 million people with $10. That's not a bad business. But here's the key thing on that blue curve that's going up into the future on streaming: it is not the record companies who get the money entirely, who have the power. It's the platforms. So don't let that happen to you on the investor side. The new guys come in, they take over the intermediary position, and you become an accidental. The only reason we still have Sony Music and Warner and EMI is because they own the catalog that we listen to, but the kids don't listen to that stuff anymore. That's all new stuff. So here's a question, right? If you don't like change, try irrelevance. That's what I say to all my clients that are big companies that can't move. You either figure out how to change or you become irrelevant, which is death. Well, or at least sort of irrelevance, right? It's very close to death. So unlearning and relearning, you know, this is the chart of The Economist showing how the sharing market for cars is growing. Sharing cars, especially in cities. In countries like South Africa or so, I think it would be a while before that becomes a big reality for different cultural economic reasons. But all of the major 300 cities in the world, car sharing is a very big deal. And do so with electric cars. We have to unlearn and relearn. And then basically what we're seeing all around us is that it's no longer the oil companies or the banks that have the power. Look at this chart here on the left. Just 10 years ago, the companies with all the power and the money, of course, market cap, banks and oil companies. Now on the right, today. You see all the tech companies, the platforms, the Apples, the Googles, the Alphabets, the Baidu companies, they have all the juice. They have your money too, I hear. So that's not surprising because that is the new currency. Data is the new oil. In fact, forget about oil. Get out of oil as quickly as you can. Because data is where it's going. Technology is the game changer, with an emphasis of saying, well, you know, it's The most valuable brands are now also, of course, tech companies. But there's a big asterisk saying that we shouldn't overdo this. Because technology is a tool. We shouldn't fall prey to technology being like the purpose of life. Because it's just a tool. It's a tool to do things better. So I wouldn't invest to that degree of saying that we're going to connect our brain to the internet, and that would be a great investment. I wouldn't go that far. So the question is, how much do you believe in technology? I think it's good to believe in technology, but only to a certain degree. And sometimes we have this conflict with what's happening in Silicon Valley. Technology tends to be magic first. You know, magic technology is the keyword of every Apple keynote. It's full of magic this, magic that. Buy some magic. And then afterwards, it's manic, you know, waking up at 3 AM and doing a Facebook update, that's manic. I see you nodding here, you're guilty of that. And then toxic, technology polluting our relationships. Going to dinner in Southeast Asia, sitting around and observing every single family has at least 2 tablets per person, watching a cartoon and chatting at the same time, and the food is not even being looked at. So I would say that's rather toxic, right? That's probably not a good thing for the technology. So the key question we have to ask when we're investing in technology is to say, will it put the human first? That's the key question. Every technology that does not put the human first, and human flourishing, as I like to say, first, is useless. Because it only serves its own purpose. It works for a while because it's interesting, like Facebook. I take Facebook as a great example. If Facebook does not succeed on putting humans first, which is to end fake news and to put real editors in place, it'll be worthless in 5 years. Because without the human inside, there's no business model. It's just automation. It's automated news for automated people. So that has to be fixed. Clearly, that's a game changer in this world. We're on this evolution, and I'm sure you've observed this. The question is how far we take this. Will you take technology all the way to the place to where we are becoming technology? I mean, right now, this is already our external brain. Our information is in here. My phone numbers, my health records, my banking, everything is in here. This is my brain, right? Google has 25 million data points about the average Google user. That's a copy of you, essentially. So if you die, Google could keep on twittering about— for you, on your behalf. That's not a joke. There's already companies that do this, right? It must be a very valuable item. Something you must have. But anyway, from this external brain, now it's moving on to our glasses, right? And then moving into our body. The question is, how far do you go? I like to say, "Well, we should embrace technology; we should not become it." We should not use technology to replace or augment ourselves to such a point to where we can't exist without it. If you lose this, you can still live. Well, most of us. But imagine what happens if you are indeed connected directly. You would be dysfunctional. That's a bad idea, and we shouldn't invest in that. I think that's actually inhuman. It's making us into machines ourselves. Because the bottom line really is technology has no ethics. It doesn't matter, you know, this is not a big claim towards technology companies. Sometimes I like to say, well, there are some technology companies that have ethics. They do exist. I have to look a little bit, but they do exist. But we have to be very careful about this, because if technology is a driving force of society, how do we add our ethics to it? How do we make it do what it's supposed to do? We have to make those companies responsible that give us technology— IBM, Google, Facebook, Baidu, Tencent, Alibaba— because they're running our lives, basically. They're just as responsible as the oil companies, which were never responsible enough, if you ask me. So on this convergence of man and machine are fantastic opportunities. I would say it's 90% positive if we find a way to balance it. We cannot go back and say, "Oh, you know, I just want to be human. I don't want to use any technology, no mobile phone." Yeah, it's possible, but you can move to Amish country. Or the mountains of Switzerland, even there would be difficult. Very hard to live without technology. Very unlikely that we can do that. Unless you're completely independently rich, you can just leave it, right? Then this is also the balance, you know, in investing. It's always about trust. But technology gives us convenience. So we need to balance convenience with trust. We shouldn't trust people just because they're convenient. But if we have people's trust and we're inconvenient, we also fail. And that is so true of financial institutions. It's like they may have trust, or may have had trust, or are working on the trust, or whatever you want to call it, right? Even though there is a trust crisis there as well. But man, if they don't get better with the technology, we're just gonna— I mean, our kids, millennials, they just say, hey, Who the hell are you? I can't even figure out how to work with you because it doesn't work. So technology is crucial for that, to fix that. We're looking at a future that has an exponential importance of human experiences. Because technology makes us so independent and convenient, we can do anything. We feel like we really want the human connection to survive. And that is the greatest thing about business, because business is always human. We shouldn't remove that. In positive psychology, they call that PERMA: positivity, engagement, relationships, meaning, and accomplishment. And that is what you have to convey to your customer. That is something that we need to keep going with. The CEO of Google said the other day, we're moving in a world that is no longer just about mobile, which you've heard forever, I'm sure. It's about artificial intelligence, machines that can think. Quite a difference here, right? So moving into a world to where this is already a reality in the US, you have a machine, a computer, that can figure out if somebody should be released on probation or not depending how likely they are to go back to the life of crime. That's what a judge does usually. Now, the machine has outperformed the judge in all of the trials. I would say that is a critical discussion. Now, do we want machines to take that over? Do we want machines to make those crucial decisions, right? Maybe, just maybe, the future president will be an AI, you know, will be an artificial robot. And maybe Trump is already an AI. I'm trying to figure that out. Something went wrong with the programming there. But anyway, the question really is about man-machine, and I think the answer really is this, right? This is not a competition. Hands down, we lose. I mean, machines are now beating people at chess, at Google DeepMind, the Go game, and yesterday at poker. What a disaster for poker players. This is the first time it wasn't anticipated that a computer can beat a game of poker, which is not about math. It's about bluffing. So here's the bottom line: no man is better than a machine, and no machine is better than a man with a machine. That's going to be our future. A man— I mean, a woman, okay? I don't know why they always say man, but of course I say man as human, right? That is our future, where we're going with this. I think that leads us to the mega shifts of things in society that are changing all the time. I don't have time to get into all the details, but I'll show you a couple examples. This is what's happening all around us, not just digitization. It's like another 10 things: personalization, cognification, robots coming in, robotization. 1.5 million household robots in Japan already, lifting people out of the bathtub, doing the dishes. Getting cheaper by the month. And we were looking at a world where we have things like IBM and doing this for the US Open. You can watch the game using IBM technology. You can see where the ball is going, how fast it's moving, what other stuff and data is happening around. You can completely go inside the game using an immersive environment of data feeds. And if you're really into the sport, is mind-boggling. How fast did this ball move, and where's the next ball likely to come from? That's what all the stuff that this technology is doing for us. And then we have things like Uber. I experimented with Uber in Cape Town. It was very interesting. But I use Uber everywhere. No matter what you think about Uber in terms of giving injustice to the drivers, for example, not having the right structure in place and not paying taxes for that matter, All those things. But Uber has one thing going, and it's using all of the mega shifts to figure out a new business model, and that business model is flow, not friction. Uber has succeeded to make it so utterly easy to spend money. That's so much easier than a taxi. And they're nice guys, most of them. I mean, it's been an interesting angle just observing that. Any business that has too much friction will fail. So number one rule of technology is remove the friction. Whether you're in the airline business or the banking business, take a look at that and take the friction out. That's what Uber is doing. That's why they are so successful that we don't know what to do with them. They are in fact so successful that they may replace public transport in Europe. That's their plan. Which would not be a good idea. But I mean, all these things are happening. First we did the steam engine, we electrified, and now The future is that we're cognifying. We're making machines intelligent. Smart home control, the Internet of Things. We're talking to devices now. If you try Siri or Cortana, this is what you hear: "Go ahead, I'm listening." That's our future. We're going to be talking to machines as if they were our friends. That is, of course, if the Internet is working. So you have a few more years of peace. But basically, you can already do that in the Tesla. If you try the Tesla, you can just sit down and say, "Hey, play Bruce Springsteen," and it will just play. No login, nothing. And that's what we do with machines. That is the immediate future. Anything that does this, like Google Home— we don't have time to really listen to this, so I'm sorry, we have to skip that part. You can see it on YouTube. But here's the bottom line: AI bots, artificially intelligent machines, will power 85% of customer service by 2020. Machines that a customer talks to, like literally talks to, are becoming possible. So if you have a call center, close it. Just kidding, use the machines. Intelligent investment advisors, intelligent robots. I'm gonna have to wrap up and so we get to the end and have some questions here. So part of that discussion is about security, which is also a really interesting space. You can imagine as we're connecting everything, our banking, our homes, our cars, our health records, our medical records. That is inevitable. Security is a mind-boggling big issue. 80% of all military spending in 10 years will be digital. The next war is digital. Let's hope so. If we have to have one. That brings up huge business opportunities, but we also have to think about the social contract. Who is in charge? Who decides what the rules are? Who holds my data? We need to have a balance, right? A balance of freedom and security. This is a huge debate these days. I have mistakenly done things that are quite confusing in the past. This is really, really a powerful question, how we balance this. So I want to end with the mega shifts and the the need for hybrid thinking. So if you're currently in the oil business, you're quite aware that oil as a major factor of the world is ending. I mean, every major oil company and Saudi Arabia and the Emirates have already announced transition plans away from oil. And you're going to have to lose $35 trillion worth of assets. Pipelines that you will not need for renewable energy. That's a little bit painful, I suppose. So the challenge is today, 84% of the world's energy is here. 84% of the world's energy: oil, coal, gas, nuclear. In 20 years, 100% here. How do you get from A to Z? Well, you have to have hybrid thinking. You have to think of today and think of tomorrow. This is the key thing. What works today, you have to continue because it works. You want to ride it as long as you can. You ride it too long, you're in deep trouble because the future won't exist for you. So hybrid thinking is doing this and then starting something else. This is very important also for our kids to think about how they're going to invest and how they're going to develop a different view. I'm going to skip this because I want to get to the the final slide here. So one key point about this, you know, we should not think about technology as being like this, right? It's just sort of like a thing that makes us into superhumans. It is something that's extremely helpful to make us more powerful, but really what matters in the end is how do we combine that with this, right? With trust, with relationships, with meaning. It shouldn't be either/or. I can guarantee you, if you don't use technology to be faster and quicker, you will not live in the next 10 years. But if you only do that, you will not have trust. So it's really the question of combining those two things in the future. Our work is changing. We're going to live in the future with colleagues that are robots. They're not colleagues in that sense, right? But we're going to work a lot more with machines. As we have already been. That becomes inevitable. We're going to lose all routine jobs. Everybody agrees on this. All of the major studies are saying, if you have a job that's routine, get rid of it, because a machine will do it. In the US, they sometimes say, if you can describe your job, a computer will do it. Quite clear what's already happening. Economists that Non-routine cognitive work, up. Non-routine manual work, you know, carpenters, plumbers, up. Everything else, flat or down. So it's kind of the end of routine. That's a huge opportunity. We have to have different skills for the end of routine. We have to have right-brain skills, empathy, emotional intelligence. So if you're looking for new jobs for your kids, Look no further, because that's where they are. They are on the right side of the brain. And of course, some stats are saying roughly 70% of all new jobs in 10 years haven't even been invented yet. We have to make our own jobs. I think that's good news. It's going to be tough for some people to adjust to that, but this is the challenge for the future. So I want to leave you with a quote from David Bowie, rest in peace. Who says, "The future belongs to those that can hear it coming." That's what I wish for you. Thanks very much for listening.