Interview With Futurist Keynote Speaker Gerd Leonhard SIBOS 2016 Digital Ethics And Technology

My guest is an authority on the ethical implications of the relationship between people and technology. I'm joined by CEO of the Futures Agency, Geert Leonhardt. Geert, thanks for joining us.

Hello.

So you are described as someone who brings information from the future so businesses can make better decisions in the present. Okay, how does that work?

Well, as a futurist, I don't predict stuff. I observe what's happening and then I zoom about five to eight years in the future for the obvious things that will happen. And I'll take that information, we call it bringing the flame back. Right. So we take the idea for example, five to seven years, quite clearly we're going to have more cars with electric engines than gas engines. We bring this back and then we try to reinvent, help companies reinvent what they do, how they do it, how they make money, how they will continue to exist. Right. Because that is, that's the challenge. Right.

So it's not really crystal ball gazing. You're not looking that far ahead. You're looking at technology that already is almost certain will happen.

Well, I always say that basically what I do, most people could do if they spend 100% of the time on it. Right. But you know, people are very busy. So if you're running a company with 100,000 employees, how are you going to get enough information about the future? You don't have time. Right. So we do that for people and we have what we call futurise, we futurize organizations and governments and people.

Well, you were sharing at the intertribe session, the Future show live. You presented some key trends for the next five years. Share with us some of those trends.

Well, the next five years, you know, this is going to be quite mind boggling. We always say that the next 20 years will be more different than the previous 300 years. So now we're looking at things like computers that can think, you know, so called artificial intelligence, cognitive computing, connected things, devices, pipelines, gas lines, cars, wristwatches, cloud computing replacing anything that's physical moving into the cloud. Media is already in the cloud. The possibility of genetic engineering, nanotechnology, digital money of course, which is a huge thing basically money turning into data. So datafication, virtualization, robots, possibly the end of work before too long the way that we know it, because computers will be able to do a lot of the work that's routine and that's going to change governments. I think it's 90% positive, but, but will quite, quite a bit of handholding, you know.

Okay, well with everything that has an upside there's usually a bit of a downside, at least. But before we get to that, I mean, specific to the finance industry, then what are some of the trends that will be most relevant to them?

Well, what we call the megatrends, the mega shifts. Those are essentially trends like digitization of everything, which means that transaction cost goes down, transparency increases, which means margin goes down. Like in the music business, you know, music is basically free now, so financial transactions will become more or less free or very, very, very cheap.

Okay, so you're talking about things like Spotify, which sort of mean.

Spotify 18 million songs for €8, right? It used to be €20 for once a day. So the unit price is just gone. And the same is going to happen with financial transactions, wealth management information, the possibility that clients have all the information of the world at their fingertips using smart computing and intelligent assistance. That used to be the bankers, supposed to be the bankers that know everything. And now everybody knows everything. And then of course, economic things are changing to a really global scenario. United States of Europe, which is a concept, I think we're seeing that currently under fire, but in 10 years we will have that. And that's going to be a huge financial relief for things like military or police or cybersecurity. But it will completely create new economies. So I think there's sort of what I call hell then. You know, it's hell and heaven at the same time. Huge opportunities. But old business models based on people not having access or being too regulated, being protected, that will evaporate. Just like the car business is now evaporating from selling cars to self driving mobility. And that is not a bad thing, it's just different.

It's only a bad thing if I'm not ready to embrace it. And that could be a challenge for some institutions who may not be ready to embrace it. I mean, will that be a really scary thought for them?

I think the biggest challenge is awareness of these things that are definitely going to change. And so you get into sort of an assumption that the business in 10 years will be very much like today with a couple marginal improvements, especially if you're successful. And that's, you know, I work with lots of banks on this. Their problem is they are so successful, they can't imagine that the recipe of success will not be the same. The same is true for the pharma business, medical business, when you're so successful and then somebody comes up, some startup from China or Silicon Valley, just undermining your. Like Airbnb is undermining hotels, right? Same thing. I call this a Tesla moment. And you realize all of a sudden these guys weren't just crazy, they're actually real and it's happening. And if you don't, if you're not aware of that, then you won't be ready.

So it's your job to help them be aware of that. Because I mean, some of these things happen, as you mentioned, it happens now and you think, yeah, it'll take a while and before you know it, it's there.

Well, there's two simple rules. One is assume less, discover more. So you don't assume that everything is going to be as it is. You're open for other discoveries, right. And the other one is that the world is no longer linear, right? It's exponential. So the changes are doubling every 18 months in technology, which means in roughly 10 years you are 30x as far and 30 times gets you to a billion. So what technology can do in five years, you won't even have a chance of imagining today. And so this is really crucial is to try to understand that this is no longer just crawling along. It's basically like warp drive in all of those areas like the blockchain and decentralized computing, cloud computing, peer to peer exchanges, all that stuff.

Do you think those areas will happen in almost a hyperspeed kind of fashion? I mean, now we're still talking about it as something that comes over, is a more long term view. It takes years to come in.

But well that, that depends what it is. You know, for some of the peer to peer exchanges are here now, they will explode, right? The gig economy to where I contribute, work outside of companies, that's happening a decentralized money system that is a digital currency around the world, that will take around 10 years, but it will definitely happen because the benefits are huge for the consumers, right? And there's lots of regulatory issues. But you know, you can see regulation is now changing much faster than it used to because technology is putting a lot of pressure on that. And of course your competition isn't the other guys, the other banks, it's the new guys, the platforms, Alibaba's and Baidu's and all those that come in from underneath and just nibble away at 50 points, right? And sooner or later just crashes.

Hence the term coopetition. I think that's the new term that's been come out.

I think if you're aware of that, that's the best protection. And if you keep your assumptions open and you discover new things and it's also about Creating human value, not just technology value. That's what my book is all about.

Yeah, we want to talk about that because it's not just about the technology itself, but it's how it's relevant to people as well. I mean, if no one's using it, obviously it's useless. So what are some of the complications there? Especially the ethical implications that might come about.

I like to say that we should embrace technology but not become technology. Because the problem is when you use technology, the primary concern is efficiency. So you make it more efficient, quicker. Right. And however, if everybody is efficient, it's a race to the bottom. Right? Everybody's hyper efficient. Customer service is automated, money is digital, and the whole thing is a giant machine. But we have to realize that people don't do business with machines. It's based on trust, relationships, meaningfulness, relevance, you know, human things. And so the human factor is a much bigger factor than technology. But it's harder to engineer, you know, it's harder to get it right. So I'd like to say if you transcend technology, you can find a powerful business model that will be about brand, about purpose, about responsibility, about trust. And that is extremely important in the financial sector. So if you have bad tech, you will not survive. But if you have good tech and no trust, you're also dead. That's right.

That is a big problem. And actually we've been talking a lot about technology here at Cybos, but we haven't been talking so much about the people involved or the users and how it will relate to them. So do you think that's going to be the challenge for the industry that while they're all wanting to jump on the bandwagon for this new technology, have they thought about what's it going to mean to my client? How is he going to use it?

Well, there's a lot of short sighted thinking about technology becoming the giant margin increaser. You know, I can fire 10,000 people in customer service and use 100 people that use computers. Right. Or apps or software. Right. And that may be true, but it's ultimately, it doesn't go anywhere, it doesn't generate human value. So it's better to take people and reassign them into value creation things, added values for clients. If you're going to let your clients use an automated customer service system like Amelia or something, that's great. But then what else are you going to do to increase value? Otherwise you become a commodity, like Spotify. Music is a commodity. So then you make playlists and you make extra Things, and that is the key. So you should not ignore the fact that technology is in the end a giant equalizer. And you have to reinvent and transcend technology to create new meaning.

What about people themselves? I mean, are they worried about how this could, you know, things like artificial intelligence could really change the way we live, work and play. I mean, how far on are we in that area? Do you feel that it will become an affecting power in our lives?

Well, anything that's routine will be replaced by machines. And that is a checkout clerk at the supermarket, the truck driver between cities, the guy that cleans the airport, the guy that inputs the data for transaction, the accountants to some degree. So anything that's routine, eventually machines will be smart enough. That's roughly seven years. What's called the singularity, the point of where machines have the same computing power and they can understand language between people, which they kind of can now, and images. So that's seven years away. And at that point we have to say really our job is to become more human, to negotiate, to invent, to discuss, to be compassionate, to have empathy, to create value. Because trust is not an algorithm. Trust is not affected. I mean it can be destroyed by mouse click. But you cannot create trust by saying I like you on some social network. Right. That's quite different. So our job is to move up the Maslow pyramid towards that self realization, meaning wisdom, you know, the added values.

Yeah, that's a little bit philosophical though. It's almost like saying let's give people time to be people, to do the things that human beings should be doing. And I guess technology is meant to do that, to allow you more time to be with family. But what if, I mean, because a lot of times we'll embrace technology and do that and then say, okay, instead of going home to my family, let me go do something else.

That's because it wasn't exponential yet. You know, the thing is, technology has always made promises that it can't deliver. Like artificial intelligence has been promised for 50 years. Never happened. But now we have the first thinking machines in business right now. This is like the self driving car we talked about for 50 years, the electric car for 100 years. Right. Didn't happen. But it's all science fiction becoming science fact. Right? So if you believe that because it didn't happen, it's not going to happen. Then you're completely on the wrong planet. Because technology is now at the pivot point where these things become possible. So we have to get used to probably in 10 years we'll be working three or four hours a day. Right now we're working more because of technology, because it's not working well. So you lie in bed at night doing your update or something. But once technology works well and is really intelligent and controlled by us, hopefully we can delegate. We can have digital copies of myself doing things for me. We already have that. It's just cumbersome. So that's the hope is that we'll work less, make the same money, find more time to do human things. Also relevant for companies, right? Trust, relationship, branding. But in 20 years, I think we may run out of work as we know it.

In 20 years, just 20 years, we'll run out of work.

Well, as an Oxford report saying 65% of jobs are, are going to be automated away, this sounds like bad news, but there's many, many new jobs, like drone operators that fly blood supply all over Africa. There's many new things, but in the end it means that we are going to separate work from income. That's 25, 30 years, depending on the political system.

Okay, so it becomes quite a different world. It's a different concept to living almost.

It's referred to as post capitalism, which doesn't mean there won't be money or capitalism. It just means the logic of what we do. You know, right now we work for a living, to make a living, but also for a purpose. And so the purpose of what we do for work may be separate than what we make for the money egged on by technology.

Okay, so what is the downside of all this? What are some of the areas, the danger areas that technology might also bring with it?

Well, exponential technology, like the Internet of things, digital money. And so they are essentially like nuclear power. We can make a power plant and heat some homes or we can make a bomb, right? And to a large degree it's the same stuff. Technology has the potential to be extremely disruptive and destructive to us and erode human values. For example, falling in love with a robot. It's entirely possible because very soon you'll have pretty smart robots. And this is not science fiction or changing the way that we fire people or hire people because of algorithms. It's called algorithmic management. Sounds like science fiction already here, right? The end of dying, you know, aging to be 150 years old. So those are challenges, you know, data protection, privacy, surveillance, application to where I give control to machines. They're pretty small now and most people are not concerned, but they are going to exponentially explode. I mean, imagine if your money is connected to the Internet. Your health records are connected, your car is connected, your home is connected. You become completely subject to whatever. If there's no protection. That's right. And that will need to be. That's a political scenario. And also for the companies to. These things will not happen until we have security.

Very quickly, one last question. Crystal ball gazing now, what are you most excited about in the near future? About all the technology that's going forward.

I think the potential to solve global problems, global warming, food, energy, water, to eradicate poverty. That's amazing. I'm worried about the side effects. But I think at this point, if we work together and create an ethical framework, we can deal with the side effects. Okay.

Well, good. Thank you so much.

Thank you.