The future of retirement

The notion of retirement is a relatively recent one, and a range of coalescing drivers might make it a transient one in human history. The world is ageing at an unprecedented rate; some 15 minutes are believed to be added every hour to a life expectancy that now exceeds one hundred years at birth in the UK[i]. This growth, it should be noted is independent of some of the truly revolutionary therapies and innovations that some suggest are on the horizon.

Cottage, Lake, Water, Nature, Summer, Tranquil, Outdoor

Coupled with a less certain investment outlook and in some cases, cultural predisposition against pensions savings, and the outlook for pensions deficits is gloomy at best. The World Economic Forum, for example, suggests that by 2050, there will be a global shortfall of some $400 trillion. To put the figure into perspective, this is five times the global economy[ii]. New policies extending the retirement age, innovative quantitative methods for planning purposes and other measures could help, but the scale of the problem would appear too significant to be met solely by reactive policies. Were the pensions problem resolvable by simple legislation it would have already been done.

Many working age people have not yet started saving for retirement or received any retirement advice. Looking at tomorrow’s over 65s reveals a complexity of financial issues; student debt, expensive housing, anaemic wage growth and the rise of the gig-economy. As a result, globally, a third of Millennials expect to work well into their 70’s and one in eight expect to work until they die[iii]. There is a temptation to view this as a problem, yet this ignores the wider changes impacting work. The move away from the traditional four stages model of life is significant; in its place could emerge a model that encapsulates learning, work and leisure episodically and as needed. The framework is not yet in place to guarantee access to continuous learning or accruing benefits from working in the gig-economy but social change is already happening. Patterns of working among older people have changed rapidly in the past couple of decades and the situation is likely to continue to evolve, not least with the expected waves of automation that will impact the economy.   We are already seeing a higher proportion of over 65’s working, not out of monetary need, but rather for the enjoyment – socially and professionally – that work can provide.

Ultimately, we must ask what role retirement plays in society, whether or not retirement is beneficial to individuals or society, and imagine new models for framing our life stages. Other questions abound; what would retirement look like under a societal system of guaranteed income? Perhaps most importantly and imminently, business leaders and policymakers need to be thinking now about how to integrate 75 and even 80 year olds in the workplace.

[i] http://www.dailymail.co.uk/health/article-4556948/Fifteen-minutes-added-life-expectancy-hour.html

[ii] https://www.bloomberg.com/news/articles/2017-05-26/retirement-savings-gap-is-seen-climbing-to-400-trillion-by-2050

[iii] http://www.cnbc.com/2016/05/31/many-millennials-expect-to-work-until-they-die.html

Advertisements

The future of CRE

Technological advances are infusing digital into the fabric of society, economies and the organisations and businesses that inhabit them. Indeed, it has been estimated that the advent of disruptive digital models account for the disappearance of half of Fortune 500 since 2000.

architecture-2175925_960_720

Commercial real estate is no different; providing players in this space as well as the companies they serve with some key strategic choices to make. Technology and the rise of the gig economy and use of teams comprising internal and external talent all call into question the current levels of CRE use. What’s more, it is estimated that by 2030, 30 percent of corporate real estate portfolios will comprise flexible space, including co-working, incubator and accelerator space[i]. This implies both a need for technological change as well as cultural change – the where, how and by whom work is done could change radically even without the prospect of widespread automation.

For CRE providers, technology could clearly become the key driver of value for the entire real estate ecosystem as well as the catalyst for change. Offering a new definition of value and a sense of partnership may be crucial for CRE businesses to survive and thrive. They will also require a new technical foundation. For example, automated facility management will demand new technical expertise and model reorganisation. This will extend to beyond what may be considered traditional CRE technologies – blockchain for example could rapidly lead to disintermediation and promote CRE transparency as information asymmetry ends.

Predictive analytics, sustainability metrics and other key drivers of value are also likely to impart change on the organisational structures of industry players, whilst consumer facing technologies – whether in the masses of data based ReTech players or via virtual reality are likely to be considered standard within five years or so. Demanding consumers and the risk of disruption via emerging ReTech players may, in some instances, force change on incumbents faster than their ability to change sustainably.

Cybersecurity is one of the chief reasons for this concern. Risk-governance frameworks and policies that account for emerging technologies such as the IoT are needed which suggests the need for collaboration with both internal and external stakeholders to improve system security. Several key aspects of dealing with the cybersecurity challenge appear in other aspects of CRE’s digital transformation. A shift to platforms emphasises orchestration and a focus on ecosystem value, perhaps suggesting wider and deeper change to corporate practices, internal silos, mindsets and data-ownership.

[i] http://www.nreionline.com/office/what-new-technologies-mean-future-office-space

Beyond Millennials: the rise of Gen Z

As the most digitally native cohort in human history, Gen Z is already the driving force behind a wave of digital business models. Centennials (Gen Z) are even more digitally oriented than Millennials and are set to impart this impact onto the wider business world. 2017 will see the first Gen Z graduates enter the workforce and by 2020 Gen Z will experience a surge of spending power as they comprise roughly 25 percent of the global workforce[i].

gen z work

For organisations struggling to connect with Gen Y workers, the rise of Gen Z will complicate matters. Research from INSEAD suggests some key differences with Gen Y; there is less of a need for constant feedback for example, but their emergence in the workplace highlights three major issues confronting business. Like Gen Y , purpose at work is cited as a key motivator, but beyond that, the state of back-end technology and the provision of learning opportunities stand out. Such changes require organisational change that will require different thinking from business-as-usual or applying veneers.

Gen Z are not only digitally comfortable, there is an argument suggesting they are digitally dependent.  Thanks to technology, 76 percent of them believe they can turn their hobbies into a full-time career. Many consider becoming a social media influencer – something still not fully understood by many companies – to be ‘…a career path as realistic as going to college and working for a big company[ii].’ Crafting technological structures capable of attracting Gen Z talent could led to integration issues, requiring a clear development and integration strategy for both technology and employees. This is perhaps especially important for Generation Z which INSEAD notes is likely to be more helpless than previous generations in a non-digital world[iii]. Aligning corporate provision with expectations is key. For example, while ‘…only three percent of working professionals currently use any kind of virtual reality (VR) applications in their workplaces, 42 percent of Gen Z expect it to make a big impact on their working lives when they enter the workforce[iv].’ Their expectations would not appear unrealistic since Goldman Sachs forecasts the combined VR and AR market to be worth some $80 billion by 2025 as the segment expands beyond entertainment and into the wider world of work[v]. How many companies have a strategic vision of how to use such technologies?

Not only must technological infrastructures modernise, so too must management and the processes undertaken internally. Millennials and Generation Z more readily grasp the reality of rapid and discontinuous change in products, services and ways of working making life-long learning is a critical element of the workplace. Deloitte notes that for millennial professionals, ongoing development support trumps all other benefits[vi], a position likely to be strengthened by the incoming Gen Z. Without strategically aligning tech and internal processes like learning to their offerings, companies may struggle to reach the best Gen Z has to offer.

[i] Source: Ernst & Young, 2016 https://betterworkingworld.ey.com/better-questions/generation-z-millennial

[ii] https://www.forbes.com/sites/deeppatel/2017/04/18/how-gen-z-will-shape-the-future-of-business/2/#236bc9635037

[iii] https://knowledge.insead.edu/leadership-organisations/what-generations-x-y-and-z-want-from-work-technology-5356

[iv] https://knowledge.insead.edu/leadership-organisations/what-generations-x-y-and-z-want-from-work-technology-5356

[v] https://knowledge.insead.edu/leadership-organisations/what-generations-x-y-and-z-want-from-work-technology-5356

[vi] https://hbr.org/2016/10/how-learning-and-development-are-becoming-more-agile?webSyncID=39938744-e905-949b-a952-32a1edc72745&sessionGUID=814bb317-0e57-55a4-29ba-1d040a08c07b

Future media

There is little doubt that deep seated technological disruption is introducing new distribution channels at scale and increasing the speed to market required. Consumers and prosumers remain in flux, with local factors – including demographics, content taste, and infrastructures complicating matters.

MEDIA

All of this is painfully obvious to many within media companies, whose recent experiences have included significant shifts in both content creation and consumption. More concerning, from an incumbents’ point of view, is the lack of strategic response. Only 18% of media company leaders strongly agree they have a clear strategy and mission for disruptive technology[i]. How can strategies for the prime agent of change – the consumer-  be crafted in such an environment? Many remain caught between two hugely different business models. Clearly the current social media platform and the traditional publisher business model differ significantly, especially with regards to the required revenue per page. It has been suggested that this state of affairs is unsustainable and because of that, offers no long term future for traditional media.

When embarking upon digital transformation, industry executives should be asking themselves whether their plans are sufficiently joined-up or whether they need to become real technology companies or else network orchestrators to succeed in an environment defined by platforms and networks[ii]? Either way, there can be little doubt that large chunks of the media landscape will migrate to platforms, and that the mastery of other platform typologies will be critical in helping them get there. The overall churn and complexity of the industry belies pockets of opportunity and clarity that only a strong data platform can inform.

Platformising operations as well as business offerings represents more than just a technical challenge however. The mental models that underpin the industry, and indeed the very beliefs that have enabled incumbents to thrive in the past (and even recent past) are being upended. What will take their place is up for discussion; in all likelihood we will witness a plethora of successful models albeit with highly uneven demographic and geographic footprints. The losers of tomorrow are altogether easier to spot; reinvention of business models, mental models and operating processes are no longer optional and those that do not realise these imperatives will in all likelihood fail.

[i] https://assets.kpmg.com/content/dam/kpmg/xx/pdf/2016/12/disruptive-technologies-barometer-media-report.pdf

[ii] http://knowledge.wharton.upenn.edu/article/platforms-will-disrupt-future-media-entertainment/

Genetic destiny

In a rush of parental anxiety, thousands of Chinese infants have undergone genetic testing with the aim of revealing what aptitudes and talents they may naturally possess or be more inclined to develop. The tests, based on nothing more than a saliva swab reportedly cost hundreds of pounds[i].

genetics

The science behind this may be dubious but the development alone confirms that we have already entered an age of human genetic mapping, enhancement and even manipulation. As costs of DNA sequencing continue to fall significantly, an increasing number of people could benefit from complete sequencing. Consider for example, that even healthy people, with no obvious personal or family medical history consistent with genetic diseases have around a 4.5 percent chance of a genetic mutation that will directly impact their healthcare needs – both current and future[ii].

As millions and, in the future, billions of people undergo genomic sequenced as part of (increasingly) standard health care, data analytics will come into its own. Genomes will be compared to life experience and outcomes – helping uncover hitherto hidden genetic and epigenetic patterns. The potential for curing a range of conditions and diseases expands with the growth of such data. It has even been suggested that such analysis could render assisted fertility the most popular way of producing babies by 2040[iii].

Stephen Hsu, a professor at Michigan State University with an extensive background in genomics, suggests that within years we will be able to predict of the future height of the human from cells taken from early stage embryos; ascertaining intelligence from such cells may be reachable within a decade. Along with the innate ethics of such precise selection, the general spread of genomics presents us with a range of other issues.

Not all countries have explicit legal policies designed to protect consumers from corporate misuse of personal genetic information. Genetic discrimination, whether overt or covert, could flourish without regulatory safeguards – rendering health insurance potentially impossible for to obtain for some people. Could such genetic information even enter the realm of work or education? Whilst personal education could result that pinpoints areas of specific weakness and uses methodologies and curricula to help address it, the flipside – of abusing such information also looms large. A number of key questions remain unanswered; perhaps most critically is how we can ensure equitable access to these technologies – and the information contained within –  so populations within a nation and even globally do not fall into a binarity of genetic haves and have-nots?

[i] https://www.geneticliteracyproject.org/2017/02/14/chinese-parents-embrace-dubious-dna-tests-uncover-childs-natural-talent/

[ii] https://www.bbvaopenmind.com/en/article/large-scale-whole-genome-sequencing-efforts/?fullscreen=true

[iii] https://qz.com/677335/by-the-year-2040-embryo-selection-will-replace-sex-as-the-way-most-of-us-make-babies/

 

A network of networks: the future work unit

Digital technologies including the Internet of Things (IoT), cloud, and mobile could render 40 percent of companies in the world today irrelevant within a decade[i]. Automation could clearly compound this since the digital replacements may naturally lend themselves to requiring less human labour. This would clearly impact a huge swathe of the labour force and further encourage already visible signs of rising freelancing, new SME formation and new forms of employment. 1 in 4 students and 1 in 3 working professionals already want to start their own business[ii]. It is more than plausible that with most activity automated, most remaining roles will be mission critical and require a range of skills not typically found in any single example of today’s professionals. Teams, therefore could become the dominant model.

NETWORKS

The infrastructure for more ‘team’ based employment is already being established. PwC has already established an internal marketplace for extra work tasks, whilst tech tools are evolving to facilitate better collaboration between professionals. Colony Beta is a tool for teams wishing to create their own collaboration network space – ‘a place to work with, incentivize, and track the contributions of a network of collaborators.’ It combines task management with “payments” and tracking[iii]. Bain predicts that by 2027, most work will be project based, with teams blending internal and external expertise to provide the required skill-set[iv]. Under this scenario, it is possible that formal mentors will appear – helping guide employees from one project to the next. The wider ‘gig economy’ talent platforms could themselves become a tool for increasing employee power, much as unions have traditionally done for manual workers. Whether or not membership of such ‘guilds’ is monetised or paid by via consumer data access could depend very much on the benefits on offer.

The transition to an agile team or network based work model could also provide an opportunity to disrupt the traditional (and fraying) employment benefits link. France, for example, is considering the implementation of a new benefits system with the aim of helping prepare for a new economy. Under the proposed scheme, the so called Individual Activity Accounts (IAAs) given to each adult member of society are designed to accumulate points in a manner not unlike airline miles. Work in both the private and public sectors are said to contribute points, whilst volunteer or pro-bono community service work could also be factored in. Points would then be used to finance an array of (personalised) benefits as well as lifelong education and training[v]. Such systems could be moderated or even initiated via new work platforms and networks (as could in theory universal basic income).

[i] http://www.businessinsider.com/former-cisco-ceo-500-billion-connected-devices-by-2025-2015-11

[ii] http://bit.ly/2jz95yz

[iii] https://blog.colony.io/colony-beta-product-summary-2121a357d61d#.95reikhrz

[iv]  http://www.bain.com/publications/articles/firm-of-the-future.aspx

[v] https://www.project-syndicate.org/commentary/individual-social-benefits-account-economic-efficiency-by-jean-pisani-ferry-2015-10

Future of learning: decentralised and self-guided?

There is often a lag between the emergence of disruptive factors and an industry undergoing transformational change. Fifty years passed between the emergence of canned food and the can opener, for example. For these fifty years we had the means of preserving food but not a modern way of extracting it. Although today’s gaps are in many cases shorter, they can still prove hazardous, not least because we tend to discount technologies and mediums that have appeared but not yet changed the world. Technology and education stands out as one clear example of this.

training

The internet may have already reduced a few critical barriers to change of educational models – access and availability as well as cost, but quality has generally remained an obstacle. MIT has recently added an adjunct certification process onto its MOOC offerings[i], helping to boost both the program’s financial viability and removing another barrier to the type of continuous learning advocated by many urging change in our learning and education systems.

Commentators often look for a big-bang change moment to confer shifts in paradigms, but the evolution of MIT’s MOOCs suggests that several waves evolution will be enough to confer radical changes. In effect the new model delivers value for money, efficiency in time and is more targeted than traditional length degrees. Indeed, David Gelernter, the Yale computer scientist suggests that ‘…over 90% of U.S. colleges will be gone within the next generation, since students demand value for their money and society demands colleges that work[ii].’ In its place, he suggests a wave of alternative credentials certified by a range of gatekeepers could emerge, with A.I presumably playing a key role in determining where gaps exist in an individuals’ education or learning and suggesting optimal – and not necessarily standard – ways to fill them.

Indeed as the pressure for continuous learning grows, both as a result of automation and companies’ demand for ever more adaptive workforces, the need for on-demand learning experiences will grow. Thomas Frey of the DaVinci Institute even suggests that ‘…by 2030 the largest company on the internet is going to be an education-based company that we haven’t heard of yet[iii].’ Whilst many companies are struggling to integrate external learning platforms into their learning opportunities, they are at least in some cases exploring new ways of putting the employee in charge of the learning experience[iv]. This would seem prudent in both developing a learning culture and organisation as well as allowing individuals to maximise their career opportunities in an era soon to de defined by white collar automation. A personalised approach to learning could similarly inform a new public education discourse. Unlike the wait for the can opener, the key technologies for unlocking this potential are already with us and evolving quickly.

[i] http://www.forbes.com/sites/realspin/2016/09/06/learning-2-0-and-the-future-of-the-disrupted-university/#3cc81d4c2fe9

[ii] https://www.insidehighered.com/blogs/technology-and-learning/david-gelernters-scary-vision-future-higher-ed

[iii] http://www.businessinsider.com/futurist-predicts-online-school-largest-online-company-2016-12

[iv] https://dupress.deloitte.com/dup-us-en/focus/human-capital-trends/2016/fostering-culture-of-learning-for-employees.html