Education for the future

Education systems are already lagging in our emergent digital lives. Our schools remain stuck in the industrial age. One in four adults already report a mismatch between the skills they possess and the skills they need for their job[i]. This is set to increase since an estimated 85 percent of employment roles in 2030 do not currently exist[ii]. This suggests that organisations that want to stay ahead of the talent curve will need to develop new talent pathways and establish new skills for employees appropriate for their changing roles. Indeed, some 62 percent of execs believe they will need to retrain or replace more than a quarter of their workforce between now and 2023[iii]

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The impact on the education we provide for our children, how we teach, what we teach and where we teach will all need to change, but of equal import is the impact on the conception of education itself. It can no longer be a period that leads from childhood to workplace, since changes in the workplace are accelerating at such a rate that current workers will need to reskill, and often. Singapore is funding adult education in an attempt to induce voluntary, lifelong skills development in an attempt to address this.

Both disruption and innovation are imminent; whether it is perceived as an opportunity of threat will depend in part on just how strategic and digitally-savvy education and skills providers are. Since the half-life of skills is now reckoned to be around five years, and adults arguably less flexible than children when it comes to learning, an increasing focus on the individual is necessary. For example, 98 percent of students express a desire for more personalisation in the classroom, as opposed to automation, perhaps revealing a need for teachers’ time to be freed up[iv].

Automation of course, is one of the most obvious ways for achieving personalisation at scale. We can apply machine learning to neuroscience data we collect, or to more prosaic ‘…things such as logs of how many times students re-watch a portion of a video lecture or where they stumble or where they slow the lecture down to watch it more closely[v].’

New models will continue to appear – both in delivery and funding. The Minerva model of learning has attracted a lot of attention as has a Californian coding school that only charges students once they earn a $50,000 tech salary[vi]. This is likely just the start; futurist Thomas Frey suggests that the largest internet company of 2030 is likely to be an education based one. One thing is for sure; the longer core facets of education remain unchanged, the greater the disruption once it does.

[i] http://www.businessinsider.com/workers-of-the-future-need-different-skills-2018-1

[ii] https://www.iothub.com.au/news/what-jobs-and-skills-will-be-needed-in-the-machine-era-486983

[iii] https://www.mckinsey.com/featured-insights/future-of-organizations-and-work/retraining-and-reskilling-workers-in-the-age-of-automation

[iv] https://www.capitalfm.co.ke/business/2018/04/mckinsey-report-shows-40pc-of-jobs-require-soft-skills-and-emotional-intelligence/

[v] https://www.mckinsey.com/featured-insights/artificial-intelligence/the-role-of-education-in-ai-and-vice-versa

[vi] https://www.fastcompany.com/40524232/this-coding-school-doesnt-charge-students-unless-they-snag-a-50000-tech-salary

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5G. Evolution or revolution?

The benefits and advantages of 5G technology are expected to be available sometime in 2019. Although the extent of its impacts are unlikely to be realised immediate, WEF suggests ‘…that it will be as revolutionary as electricity or the automobile[i].’ Both the lack of an immediate ‘wow factor,’ and 5G’s long term potential are based in the fact that it is a significant enabling technology. In and of itself, the obvious immediate impacts include higher speeds, low latencies, lower power consumption and greater reliability.

Smartphone, Technique, Appliances, Link, Internet

However, the global economic impact of 5G in new goods and services is forecast to reach $12 trillion by 2035[ii] as the technology allows us to do different things and move from simply connecting people to information towards connecting people to everything.

In the short term, augmented reality apps could proliferate on smartphones, shifting how we access and display information. In the medium term, the synergy of 5G with emerging industries such as the IoT will ‘…open up potentially new roles for intermediaries in the value chain, positioned downstream of network operators, offering to bundle and repackage connectivity for particular industries[iii].’ 5G will also prove a catalyst for connected healthcare, autonomous vehicles and virtual reality as a medium across multiple industries including education and various customer facing industries.

In the longer term, 5G could enable edge computing and analytics – shifting consumer journeys, data strategies ad fundamentally redrawing business and operating models decisively. Ironically, what is largely a plug and play technology will prove much more complex organisationally. Data architectures, talent needs, ecosystem partnerships and fundamental role in newly emerging spaces will all need analysing and all will impact business and organizational models. Perhaps one underappreciated source of disruption is the geographic source of many of these models.

According to CCS Insights, China will account for half of all 5G users in 2022, and 40 percent of 5G connections by 2025[iv]. Since emerging markets are an increasing source of innovative models and services seen in developed economies, this could increase over the coming years; new competitors, new partners and new models will almost certainly abound. The economic impact within China of building a significant 5G capability could be profound, it could ‘…account for 3.2 percent of China’s entire GDP in 2025, generate 8 million jobs, and add 2.9 trillion yuan ($454bn) in economic value by 2030[v].’ The impact in developed economies could be greater still, especially if businesses are unprepared for the raft of organizational and business model changes that will be required to get the most out of 5G.

[i] https://www.weforum.org/agenda/2018/01/the-world-is-about-to-become-even-more-interconnected-here-s-how/

[ii] https://www.weforum.org/agenda/2018/01/the-world-is-about-to-become-even-more-interconnected-here-s-how/

[iii] https://berec.europa.eu/eng/document_register/subject_matter/berec/reports/8008-study-on-implications-of-5g-deployment-on-future-business-models

[iv] https://www.sdxcentral.com/5g/definitions/china-5g/

[v] https://www.sdxcentral.com/5g/definitions/china-5g/

Could auto’s form the ultimate social network?

It is likely that ‘…in the next 30 years, we are likely to see more change in transportation technology than we’ve seen in the last 100 years[i].’ As the ultimate mobile device of the future, cars and the wider automotive industry are exposed to a wide range of technological developments; 5G, artificial intelligence, the IoT and blockchain. Another technology – 3D printing –  could reduce ‘…the cost of developing an entirely new vehicle from $600 million today to just $60 million[ii].’ Taken as a collective, these technologies will empower the 69 percent of industry executives who rate ‘…creating new services-based offerings,’ as a significant growth area for the industry[iii].

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The business models enabled by autonomous vehicles coupled with the evolution in the concept of personal transport and the increasing digitisation of cars mean the traditional industry boundaries are collapsing. This inevitably alters the skillsets, strategies and culture needed to compete. The car industry is becoming a real ecosystem featuring collaborating with hundreds of other companies to create a network of networks. Indeed, 73 percent of automotive executives say that collaboration with other industries will become the centre-piece to their growth strategies[iv]. The potential prize could be huge; the wider economic landscape created by autonomous cars is forecast to be worth some $800bn in 2035, before growing to $7Tn by 2050[v].

As value chains in the greater automotive ecosystem collide and merge, opportunities for interaction designers will emerge. In some ways, this could be beyond what we associate with current interaction since the prospect of screen-less communications presents new design and interaction issues. New approaches, skill sets and mindsets will be needed to compliment the requisite analytics experts that will underpin the future automotive market.

It is plausible that the future automotive ecosystem, will resemble modern technology ecosystems with their platform business models, permission-less innovation by developers, and domination of software-centric companies. The automotive industry, perhaps more so than some traditional tech companies, could become a blueprint for future ecosystems across a range of industries.

[i] http://www.businessinsider.com/6-predictions-about-the-future-of-transportation-2015-11

[ii] http://www.zdnet.com/article/vroom-how-3d-printing-is-revving-up-to-save-the-auto-industry-big-bucks/

[iii] https://public.dhe.ibm.com/common/ssi/ecm/gb/en/gbe03891usen/ei_blockchain-for-mobility-services.pdf

[iv] https://www.ibm.com/blogs/internet-of-things/automotive-future-iot/

[v] https://www.vision-systems.com/articles/2017/06/intel-autonomous-driving-will-create-7-trillion-passenger-economy.html

From supply chains to value chains

Only 38 percent of executives suggest they are extremely or very confident that their supply chain organisation has the competencies it needs today[i], let alone tomorrow. It would therefore seem only a matter of time before the economics, technological capability and desire to improve security merge to transform how this aspect of business is done – for both manufacturers and service based industries.

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An estimate 65 percent of the total value of a company’s products and services comes directly from its suppliers[ii]. Technologies from artificial intelligence and robotics to blockchain could all help boost the efficiency of supply chains, and especially with regards to blockchain, deliver transparency into generally opaque supply chains. Just 6 percent of execs have full transparency of their entire supply chain, while 65 percent have limited visibility or none[iii]. Current supply chain risks therefore remain generally unknown, although a couple of trends on the horizon could help elucidate these. The first lies with machine learning; McKinsey predicts it could reduce supply chain forecasting errors by 50 percent and even reduce lost sales by 65 percent with better product availability[iv].

Autonomous cars and shifting logistics models could blur with P2P transport and inevitably become cheaper, new markets could open with latent capacity making the transportation of smaller item goods very inexpensive[v]. One key implication is the coming end of linear supply chains; in their stead, digital supply networks not only have the advantage of shifting models from product-centric to service-centric but could allow for such eventualities as outcome-based pricing[vi].The sharing economy will ultimate integrate a network of players, and open up a whole new supply chain paradigm.

That said, a bigger source of potential disruption lurks within other technologies. ING cites calculations that suggest up to 50 percent of manufactured goods could be printed by 2060; some scenarios in which investment doubles every five years even show this threshold reached by 2040. The result could be a reduction of world trade by one quarter by 2060, or even two fifths by 2040 under the accelerated scenario[vii].

Central to many of these sources of change is a shift of control from producers to consumers and the wider business ecosystem, or network. The future network, comprising company, supply chain, sub-contractors, markets, investors and more will all exist within a single network, even if constituent parts will inevitably be enmeshed in other networks.

[i] http://www2.deloitte.com/us/en/pages/operations/articles/supply-chain-talent-of-the-future-survey.html

[ii] http://www.digitalistmag.com/finance/2018/02/21/unlock-future-of-procurement-with-cognitive-computing-05879984

[iii] http://www.supplychainbrain.com/single-article-page/article/six-percent-of-cpos-have-full-supply-chain-visibility-survey-says/

[iv] https://www.forbes.com/forbes/welcome/?toURL=https://www.forbes.com/sites/louiscolumbus/2018/03/11/10-ways-machine-learning-is-revolutionizing-manufacturing-in-2018/&refURL=&referrer=#58961c5c23ac

[v] https://medium.com/startup-grind/mind-blowing-driverless-future-fcc5197d509

[vi] https://knowledge.insead.edu/blog/insead-blog/the-era-of-linear-supply-chains-may-soon-be-over-6296

[vii] https://think.ing.com/reports/3d-printing-a-threat-to-global-trade/

Why digital disruption could accelerate…

Asking one hundred or so CEOs for their definition of digital transformation would inevitably lead to more than one definition. Despite a probable proliferation of descriptions, an increasing number point to it as impacting their industries, with around half of executives confirming this, compared with only 15 percent in 2015[i].

Multiple technologies can be held up as transforming industries yet it is important to keep in mind that digital transformation is not just about adding new technologies or channels to existing organisations but rather about structural changes in the way an organisation operates. The two are related however; more than half of executives believe one of their biggest barriers to implementing digital technologies is their internal corporate culture.

A key component of this lies in skills and education. Some 70 percent of CEOs say they’re worried about the digital skills of their senior leadership team[ii]. In such instances delegating digital transformation to a CIO, for example, is unlikely to prove successful. It will take holistic executive planning and action that targets talent pathways, skills shortages and an aligned tech and overall strategy approach for digital transformation to succeed. This must include the entire workforce, not only are executives typically lacking in digital skills, nearly 6 in 10 of them believe their workforce isn’t ‘…sufficiently security savvy,’ enough to move forwards with digital transformation[iii].

Executives are often bombarded by the forecast of dire consequences of failing to digitally transform, and neither stalling out and irrelevance nor the efficiencies and new value propositions that can be unlocked by digital change should be ignored. Rushing blindly into digital transformation risks one of two unfortunate outcomes, however. The first remains the possibility of a lip-service grafting of new technologies onto old processes, structures and ways of thinking that does little to boost competitiveness or open new channels of business. The second is the lack of skills that mean that digital transformation without adequate cybersecurity could be a ‘…train wreck waiting to happen[iv].’ Some 1.5m cybersecurity positions are expected to go unfilled by 2020.

Organisations still to undertake digital transformation, or stalled part way on it, have a significant task awaiting. Attracting new talent now requires technologically savvy workplaces and ways of working, yet the implementation of such technologies requires a skill and talent base often lacking. This chicken and egg scenario necessitates the somewhat risky rebuilding of the organisation on the fly. Although a mainstay of strategic thinking and management articles for a while now, it is likely that the impacts from digital transformation are only just starting.

[i] https://connectedfutures.cisco.com/article/industries-in-the-cross-hairs-of-disruption/

[ii] https://www.strategy-business.com/blog/The-Need-for-Digital-Know-How-Starts-at-the-Top

[iii] http://www.eweek.com/enterprise-apps/dell-survey-suggests-how-automation-ai-will-change-workplaces-by-2030

[iv] https://www.linkedin.com/pulse/digital-without-cybersecurity-train-wreck-waiting-ralf-dreischmeier/?linkId=47157533


Insurance’s disappearing act?

The core model underpinning swathes of the insurance industry is shifting from the compensation of loss to the prevention of loss. This core shift has profound implications for insurers.

Enabling technologies, from the IoT to automation, and shifts in consumer expectation are common across almost all segments. Take auto insurance for example; many analysts forecast a drop off in the issuance of auto insurance given the emergence of self-driving cars but at the same time vehicle manufacturers are starting to assume responsibility at a product level. Effectively they are bundling insurance into their own product. It is even plausible that in many cases, insurance will only be sold when vendors package it with another service or product. The potential for significant disruption and drop off in traditionally core revenue stream, such as auto, is often highlighted; what is sometimes neglected is that the insurance need is shifting rather than disappearing.

There are clear opportunities to explore new and emerging revenue streams, some of which replace stagnating, or else failing, existing streams. Others however are entirely new. Rubica, for example, now offers individual cybersecurity insurance for personal customers that includes 24/7 monitoring, under the PURE insurance company umbrella. Their model is built on software and concierge services, both of which they believe will actively help to inform and educate their clients.

Doing different things – in this case offering new services – cannot be successfully done using traditional methods. Indeed, carriers will need to transform their business operations; doing so by 2022 could yield $375 billion in new revenue globally[i]. A.I is the obvious vector that will change not just the work insurers do but also what service they can offer their clients. Platforms, non-traditional intermediaries and ecosystems as well as value added services are also cited as contributory factors. Moves are already being made in this arena; Apple and Cisco have teamed up with Allianz to financially protect customers against cyber-attacks. As part of a broader package, Allianz will provide discounted cybersecurity insurance coverage to customers that use certain Apple devices and Cisco security products[ii]. The same insurer has also launched a JV with Chinese internet giant Baidu, to help customize products for individuals by accessing a wealth of data.

New opportunities also lie with the shifting nature of consumption and usage. By 2025, the European sharing economy could reach €570bn in transactions and €83bn in platform revenue[iii] (from €4bn & €28bn in 2015). The demand for accessible and customizable insurance will doubtless continue to grow. A.I will be key, but new skill-sets, new approaches and new mindsets are no longer optional for insurers. The underlying need and rationale for insurance is changing; insurance is becoming more ‘ambient’ rather than disappearing as well as shifting into new areas. Carriers need to ensure they are part of the evolution, rather than its victims.

[i] https://newsroom.accenture.com/news/insurers-that-transform-their-businesses-and-operating-models-could-see-us-375-billion-in-new-revenue-growth-accenture-analysis-finds.htm

[ii] http://fortune.com/2018/02/05/apple-cisco-allianz-cybersecurity-insurance/

[iii] https://becominghuman.ai/the-curious-case-of-sharing-economy-e2b401035a9a ?

Keeping pace or making peace? Our future with technology

In his MIT Sloan piece, professor Amit Mukharjee suggests that ‘…history warns us that mastering digital technology won’t determine which companies become corporate winners. Instead, making the necessary organizational and leadership changes will[i].’ One only needs to look at past failures such as Kodak to realise the merit of his words; despite developing digital cameras before anyone else Kodak was ultimately toppled by them because of its inability to shift its mindset and models. However, almost a third of businesses would appear to possess the Kodak mindset, and worry that technology rather than business needs will dictate their company’s future direction[ii].

Such a position suggests swathes of business are either passive in their technological exploration or perhaps too dependent on a given technology. More worryingly it suggests that some mistakenly conceive technology as strategy. Building a long-term strategy around a single technology is seldom a good idea yet there can be little doubt that technology is increasingly outpacing business, education, government and in some cases, consumers. The question we need to ask, then, is whether we are prepared to absorb the digital and automation revolutions, as organisations and perhaps even societies?

Organisations must also be careful not to fall into any of the gaps opening up between technological capability, their customers’ expectations and their own capacity. To give just one example, the traditional top-down model of innovative change is not only impossible for today’s fast-moving industries, it also constrains incumbents’ room to act.

Companies should also develop an early warning radar for the opportunities that technology could help create. Technology, or rather the strategic use of it, will continue to erode industry boundaries and craft new markets at the intersections of collision. At the boundaries of property, personal risk management and insurance, a nascent industry not owned by any of the above is set to redefine consumer wants. Will we need insurance when a water leak is identified as it is occurring and professionals immediately alerted to fix the problem? Perhaps we will, but not to the same extent as before. This is not something that new tech allied to an old business model alone can create, fix or mitigate; organisations wanting to play in this space will likely need to make huge changes to their organisational and business models to compete with future start-ups.

If we ignore silos and instead focus on outcomes, we realise the service world is full of possibilities. If we apply the same thinking to our organisations, we start on a path of accepting that organisational agility is a critical competitive advantage and a prerequisite for rapid tech turnover. The idea of keeping pace with technology is therefore a flawed one, as is the idea that we can ‘make peace’ with technology. Future leaders will need to embed, or at least implicitly acknowledge this, at the heart of their organisations. Leadership, technology, organisation (and business models) and future skills and talent all impact each other to such a degree that, from a strategic sense, you cannot look at tech in isolation.

[i] http://sloanreview.mit.edu/article/the-need-for-culture-neutrality/

[ii] http://www.digitalistmag.com/digital-economy/2017/04/24/how-smbs-benefit-from-future-technology-05044174