 interesting room I'm gonna have to walk back and forth so I can cover all of you it's a great pleasure to be here so I currently live in Switzerland a neutral country I was born in Germany so if I speak about perfection I know what I'm talking about but I also lived in San Francisco and Boston the US for 17 years so if I speak about awesomeness that's my American part I can fuse all of those together I was just thinking as as the introduction was happening is that we're really moving in the world that used to be dumb in the sense of disconnected well basically not network to world that's becoming smart that's now and then after we get smart what is the next step human right because this is the interesting part what's happening with automation and robotics is it's going to force us to figure out what it means to be human because if we actually are in the end reduced in the workforce by some people say 50% that sounds it's gonna be great for the margin and the efficiency right and the profit but it changes entire makeup of society and then in addition to this of course all of us will live to be older our kids are very likely to live to be 90 or 100 as a default right we were gaining currently eight hours a day of longevity that's one third of a year in one year mind-boggling right and the whole possibilities of example genetic engineering the cover of wired magazine last week the possibility of defeating cancer changing the genes to not have Alzheimer's imagine what that will do to global population of course so lots and lots of issues for business and for society I will touch on those today we're going to distribute the PDF later on through the app I think and we also take questions of course through app and through the app and actually in person as well we can take questions in person that's still possible also I have quite a few slides so we're also going to do some polling to get your opinion on things I currently focus my work as a futurist and on these very simple things here most people think that the future is to somebody who can predict the future or is trying to or of course that would be ludicrous to do that I think there are some people who could do that like Alvin Toffler and really brilliant people in in Cichloric and so on and and maybe Ray Coates while my work is on four sites and four sites is what we all have if we had time to listen to them there's a great saying in China every time I speak in China people are saying well basically if you want to know about the future ask your children well it's obvious you know kids don't have to make money they're not busy trying to figure out how to earn a living right so they can play they can experiment and this is why they know the future so my work is about four sites it's about observations and before I get going I would like to encourage you also to spend three to five percent of your time on four sites which is to look at what's happening observe and work about five years into the future if you do that your job will be safe and this is one of the key issues for companies is not looking at what could be but looking at what is and of course you know you have to look at what is because that's how you make a living but three to five percent Google does about ten percent the engineers are allowed to do twenty percent allegedly really know that actually works anymore but this is a very very important thing for our future my company is based in Switzerland also in San Francisco and our motto is it wasn't raining when Noah built the Ark and that is so true for many of our customers our clients we have over two on the clients going from Samsung to Sony to newspaper organizations and consumer brands and consulting companies many others and so basically the idea of saying let's take a look what's happening by 2020 so we can develop a plan how we can be part of that future I'll give an example six years ago we did a brainstorming workshop for the CEOs of a really big German automobile brand a car brand and all the CEOs of the different divisions were there six years ago we said okay basically it's quite clear self-driving autonomous cars electric cars shared cars public cars you know that sort of thing that we have today and what we got was laughter just flat-out laughter well guys like us you know we like fancy cars right so we buy fancy cars you can't possibly imagine that somebody would want to share a Tesla self-driving car through an app or something you know which we which is based on this the topic number one today every single car company in the world is looking for electric vehicles for patents for for ideas for public cars and so on right that's a huge shift and if you're the CEO of Porsche would you appreciate this kind of shift not really I mean it's a lot better to sell $200,000 vehicles to a bunch of people who have the money than to sell a $20,000 Porsche self-driving car to the city of Singapore right that's obviously better I mean I used to be a musician and producer in those days we sold records remember that record okay plastic today if you give a CD or DVD to your kids for Christmas they call a therapist it's like doesn't even exist so in those days it was 20 bucks for a CD that you would sell it for and you would get maybe three or four from the sale today you're on Spotify you get 0.0.0.0.0.0.0.1 cent per play so that's how society has changed this is the most important curve exponential development and this is very hard to understand because you know humans are not exponential we don't live faster because we use Twitter we don't have more friends really because we have Facebook all linked in we can't we're limited to 150 people in our closest surrounding we're not going to have 15,000 even Deepak Chopra wouldn't have 150,000 people as friends right it's impossible so this curve is really tough for us because also the other thing is when we're the beginning of the curve here we basically at 0.001 and then we double that it's still nothing but if you count from 1 to 7 on the linear curve you get to 7 when you count exponential you get to 100 now think about that difference what that means is that every year Moore's law Matt Carl's law and so on this is a mind-boggling challenge for us to imagine what the world would look like in five years from today it's going to be like going into a science fiction novel like literally I was in Tokyo three months ago using an app called say hi and say hi allows instant translation in real time through the app in 34 languages I had a half hour conversation with the sushi chef in Japanese I mean about simple stuff of course not about you know personal problems or something but it worked fine I spoke into the I've been German came out the Japanese and he did the other way around and it that's like Star Trek right and now every day we're facing those issues are happening we're basically at the pivot point of technological change exponential change so if you think the world is a crazy place today just give it five years you won't even recognize there'll be things that you think that clearly are not possible take intelligent digital assistance Siri Cortana you know all that stuff that we already have it's not that impressive it works but think about that exponentially it will outsource everything that your personal assistant your person you know a flesh-and-blood person does today it will do all of that in five years and more and better and cheaper or for free in fact Google will give it to you for free in return for your data of course that's their business model the Faustian bargain humanity will change more in the next 20 years than the previous 300 years a lot of people saying well that's not we had big changes in the printing press and the industrial society and steam engine yes that's all true but what's happening today is exponentially so much bigger now if you're running a business you have to be aware of that of course and of course personally as well because you're going to have to prove your own value and how do you prove your own value in an exponential world while not by beating machines there's just no way we can do that we're not going to be faster quicker smarter more efficient than than the machines for a while it looked like we could but Raycourt's rather found of the singularity movement there's many issues I have that but I quote him anyway he says in 2027 we're going to be at the point where the capacity of one computer will be equal to the human brain will probably happen before that right now the capacity of the most advanced computers are cricket in terms of the brain activity so exponential change coming in this direction and you can clearly say this is my keyword number one hell then I use the hashtag on Twitter hell then which is hell and heaven combined because could be both our job in business is to make sure this is mostly heaven and that's our job there's no way we can avoid the unintended consequences for example the more data that we have available the more naked we get so to speak people can find also a lot more stuff about us so if you're linked in to do networking you become more naked and that's kind of a side effect right but you don't want that side effect to overweigh the positive result so that's why I call that hell then that's very important to keep that in mind and we're still vastly underestimating the velocity of that change to look at this graph autonomous vehicles it says here that in 2035 we'll have roughly a hundred million models sold that was only three months ago you know what the expectation is now 1.5 a billion this is just the velocity is mind-boggling now we have 3d printed cars right this company called local motors 50 parts they will print the car with a 3d printer how real that is I know the general electric is looking to print parts of the engine and eventually print the entire airplane engine with a 3d printer think about what that would do for manufacturing or shipping logistics I do a lot of work for Unilever on their ideas of the future and some of those companies are now looking into printing ice cream on demand in a 3d printer so you don't ship the ice cream ship the printer I mean these things are going to be velocity really amazing so it's no longer the question about what if you know this was the question when I grew up doing startups on the internet said what if we could put the music into the cloud and then people would download it you know and pay a little bit for that that was 1997 that before in Amsterdam the question today is this right what when not what if because when you look at technology and you ask a question can technology actually do this right the the answer is always yes well like 98% of the time because it's possible now the question is can we invent solar energy and distribute it around the globe so it can solve our energy problem the answer is yes but you know when how much investment will it take but it's basically yes 2015 will be the first year where a major oil company will leave the oil business to go into renewables or the oil price isn't coming back and I'm sure you know you're aware of that right it's not gonna go up again so you're losing money sticking with an old business you know talk about painful change I mean looking at this number here we are here at the takeoff point where human performance is slightly better than machine performance today but that point is over soon and that is probably a good thing and I would grant you on your organizations you can probably save tons of money and make a better margin and automate that that's a good thing but I tell you about what that means really in the long run it seems like a good thing and it is but it's not it's not permanent right I mean the purpose of life isn't efficiency right efficiency is a good piece of the that equation I mean if you look at what's happening with genetic engineering sequence in the genome ten years ago a million dollars today 734 dollars in five years will be cheaper than flush in the toilet and basically in five years we will all be able to have a genome sequenced it'll be standard procedure imagine what happens then talk about machine learning we could put all that stuff into a giant engine that's a pretty mind-boggling now then we get to ethical things you know should we allow people to improve themselves there my friend Frank Diana put together this slide which you can when you download it look at more detail but basically what it means is that we have exponential changes but they're also combinatorial that means on top of each other this is a scary part if it was just one thing like 3d printing or artificial intelligence we could follow that but now we have 28 or something all happening at the same time the internet of things cognitive systems now the technology robotics the blockchain digital money they're all happening on top of each other so not only do we have to think exponential we have to think combinatorial right we have to look lateral I have to see what else is happening around us and we also have to think of this as a combined effort where we go from one to the other fairly quickly the company really knows how to do this was mentioned earlier as Tesla I mean Tesla is the combinatorial company by definition they're not a car company they are a mobility company they are an energy company they're in the solar business they want to redo our grid they're actually in all of those businesses of course that's a lot easier if you have Elon Musk as a CEO and if you can go like you just go for it right without considering shareholders or ROI or you know as a big company like a big bank this is a lot harder obviously because they have history and legacy so that is kind of the combinatorial thing that's really important to consider so I was in the music business for a long time I used to be a musician and producer made 20 records and then when the internet came along I set out to help the record labels to survive the internet you know as you can tell I wasn't successful but for the simple reason that I want to describe to you I wrote this book called the future of music in 2005 and looking backwards what Peter Drucker said about innovation is so true as an example here in times of change the greatest danger is to act with yesterday's logic and talk about the music business right I talked to all those guys in a concert I stopped doing it years ago but basically the music business guy said if people can download music for free we don't have a business so therefore we go after them not to download for free they sued 257,000 people for legal downloading they went to lobby and all that stuff didn't do a thing they lost 71% revenues in 12 years and recorded music why is that because a you can't really do that on the internet it's a copy machine basically and b people want to do that they want to be able to go to the cloud and do these things right you have to give them what they want rather than what they should have so now we have this right this is a slide of music the red bar is CDs I swear in five years nobody will know what a CD is except for us who collect them they it's all streaming it's all in the cloud Apple Google Deezer Spotify so what happened here this is a good lesson forecast for music is this forecast for streaming music basically just hitting a button for a place it's huge another one saying there was sort of a valley of death you know a place where you made less money but on the other side it's huge well here's the difference it will be very big but it won't be theirs will be these guys who run the music business well Apple already runs the music business right it won't be am I and Warner and Sony or Universal it'll be those guys you don't want that to happen to you whether you're a credit card company or a bank or an energy company this is the most important part because you realize at a certain point there is a new business but I'm not running it in advertising for example all the money in internet advertising and publishing goes to the store dots like Buzzfeed and others right doesn't go the New York Times so that's something to figure out how do you actually do this before this happens right so you you come too late to the party too little too late so whatever you do don't do what the music business did they're finally getting into it and figuring out it's a little bit late now and basically in five years very few artists will consider EMI music the first choice to get their music out right well they're already thinking it's basically YouTube right so anyway so there's two major things happening here one is automation anything that can be automated will be automated that's the law of digital Darwinism fast food joints truckers on a highway going a straight road in a like a car train airline pilots I will take longer because we will feel reluctant to go into the airplane that's a robot right but big big airline companies are looking at this today and saying wow so much money we could save if we didn't have unions with with pilots right like Lufthansa big issue so automation is everywhere and the other one is dumb things are becoming intelligent and I'm not talking about people I'm talking about processes and devices logistics we could save 60% of costs by making connecting interconnecting logistics shipping maritime solutions containers products that's happening across the board everywhere including for example money financial transactions so automation and intelligence together very very powerful thing happening to J brain from Google said three years ago four years ago we want Google to be the third half of your brain that's interesting well we've sort of they become sort of the second half of our brain already right so basically our mobile devices our outsourced brains a lot of people don't remember the phone number of their partner because they have it saved in the phone a lot of people can't find their way around town without Google Maps it certainly would never eat anywhere without looking at trip advisor so they have already achieved this goal in fact Google is on the way somebody from Google here okay so I can speak openly that's good they're also a client of mine so I have to be careful but but Google is on the way of becoming the global OS the global operating system Google is buying every single artificial intelligence company you can think of including Boston Dynamics Boston robotics you know they the military robot Google is on the way of shifting from a surge engine to an artificial intelligence enterprise you will not be searching in fight and probably in three years Google will know what you want and show it to you without you doing in fact Google is hoping to be your digital assistant for your life for everything whether it's money dating phone calls financial investment airplane tourism everything so mind-boggling thought so now we're moving into a new ecosystem and I think if you're part of the old ecosystem which was in many ways an ego system really it's about large companies running large things now it's completely interdependent I live in Switzerland where the Swiss people thought until last year that they can be independent still as they have been for a long time and I have a Swiss passport now so I'm speaking as a French as a Swiss citizen as well but the Swiss government has realized it can't it cannot be independent in a world where everything is connected so in January this year they did away with the tying up of the euro that was a huge shock for Swiss business because they thought they could be independent and regulated but it's not possible it's basically an ecosystem devices cloud objects things people and the interesting part is this is an ecosystem of intelligence it actually knows what's happening with the other parts which is new this is Zuckerberg's company you know our friend Mark Zuckerberg who brought us the the biggest one of the biggest oasis in the world Facebook he invested a mere 250 million dollars in this company I think called vicarious and this is the headline of the company we're building software that things and learns like a human of course if you work for IBM you would laugh about this because you know you've been thinking about that for 50 years right it's not new but the claim of having an intelligence and things and and learns and maybe acts like a human I guess that's a tall order and that is on top of this thing that's called hyperconnectivity right I'm sure you know what that is right high speed all the time anywhere always on fear of missing out called FOMO I mean we're all now on average work 20% more because of social media and mobility that's been a lot of research on this right so we we lie in bed check in our Facebook update or you know check out emails before we go to bed before we go to sleep but so hyperconnectivity is everywhere now and imagine when that comes to China and India and Africa six billion people hyperconnected people what kind of fluidity we have their liquidity so basically what we have here is as a headline and we can save this first exponential convergent combinatorial interdependent and the singularity kind of idea is saying when this all comes together then managed machine have converged now there's a scary thought I mean automation kind of gets us to that point I explained what that means but looking at all of those things that are coming together it's essentially like like a network or these things are hanging together AI ubiquitous computing all that stuff so this is a result humanity and technology into the twining I think about what that will mean for your kids I mean you think that's a tall order now well in 10 years you won't even know different because there's one big difference technology does not have ethics well we wouldn't want it to have ethics really some technology companies have ethics some of them or most of them are helped but technology itself is void of values void of principles never mind religion or beliefs or those kind of things but just principles as a real self-driving car would need ethics because when we drive and we're making ethical decisions all the time we're gonna kill the frog or we're gonna run over the woman with a baby or we're gonna go a little bit too fast or maybe drink a little bit and still drive and we make those decisions all the time actually pretty hard to get a computer to do that so that intertwining is really what I call man machine I use that hashtag on Twitter you can read my stuff on this so here's a question I have for you how much do you believe in technology oh well this is why you're here right because you do believe in technology all right that's what we're discussing here but how deep does it go that's a crucial question you have to ask yourself I believe technology is absolutely fundamentally critical for our future to make our businesses better but it cannot be the only and final destination I'll explain why that is so it's kind of a you could you should say a schizophrenic point of view right we we have to have technology to do that but if we bang only on it we become completely a commodity like the music guys did so I'll give you an example here wired magazine last week genetic engineering what they call DNA editing becoming a real possibility in the next 10 years sounds like a great business for a lot of people but imagine if this is invented it will cost say $10 trillion to develop this maybe but the operation itself will take four seconds if we don't actually share this achievement we have the primary reason for terrorism I think about that for a second get like a pharma company that sells AIDS medication we already had enough issues with those considering who should buy it and who should buy it for what price and so on but this is going to be an order of magnitude and beyond that of course the end of dying I mean this is no joke there are at least 50 companies at Silicon Valley whose goal it is to end aging and eventually you know the death of death right basically probably too late for us I think concerning what did this stuff we have already done but so the Ray Kurzweil of course is a spot he takes about 140 packets of vitamin a day because he wants to get to that point where it's possible you know would like to him but so here's the question now computer has has become like this from the main frame to the desktop to the mobile devices implants things that we put on our wristwatch Google glass and all these things that are happening so basically from inside the body from outside the body to inside the body brain computer interfaces BC eyes already working when you have to really work out pretty hard on them to actually make them work but if you are if you have a million dollars and you have a BC eye you can walk again as a quadriplegic it's possible it takes a huge amount of money and a couple years of training exponentially speaking in five years this is going to be available brain computer interfaces where I can control a whole bunch of other machines and possibly other brains using my interface through the internet connecting my brain to the internet basically so then we end up with this scenario we have to ask a question of how far do we want to take this as far as technology is concerned how far should we take this because quite clearly if we do this you know we can we can automate away a lot of really cumbersome stuff we can how far should we take this you get the point right this is obviously not real it not yet but I mean this is a question of taken and you know you know about coach or implants where you have a hearing problem you can have an implant that gets you to hear again I think about 450,000 people in the US have that and it's basically a fake ear going directly into the nerve so that's possible and now this people experimenting with fake eyes a bionic eye so it's not that far removed really good luck to Apple for realizing this but so what I think about this basically is this right we're looking at the potential of technology being what I call 90% heaven and 10% hell that's to say that all the stuff that's happening is potentially really beneficial solving things like climate change global warming issues and 10% would be unintended consequences that that are going to happen for example if we have more drones to deliver things and people will buy guns to shoot them down that's already happening but certainly an unintended consequence but if we're not very careful with this and it could also flip that's kind of like nuclear energy you know we have to really make sure that we actually are in control of this so the question really is ultimately about the ethics of technology so when you're thinking about rolling out a an automation plan you have to also think about the final destination where you're trying to go with this what you're trying to achieve what is the value of your business beyond the efficiency that's why it's wiggling so we have a company in California started three months ago called human longevity Inc this is not science fiction this is real funded by companies like Genentech this guy named Peter Diamandis who runs the Singularity University he's basically starting a company where you can combine all the biological data like genetic and phenotype and and use insights from biological data from computation machine learning and so on and eventually get a couple million genomes together and figure out how you can solve problems related to the genomes and how you can then actually change them and this is what he's saying about this business right this is a quote from Peter Diamandis in an interview on wired on PC Mac actually he says there's six to seven trillion dollars a year spent on healthcare half of which goes to aging so the question is what would people pay for an extra 10 20 30 40 years of a healthy life it's a huge opportunity now this kind of speaks volumes about the motivation I'm not saying it's a bad motivation I'm just saying that that seems like an extreme case right so we have to think about what that means in the long run when we do those kind of things where is it going because now we're going into an era where impossible is doable quite literally doable the speed Skype has automatic translation built into the latest version of Skype if you download it I think most people will already get the latest software so you can speak in German comes out in 34 languages in real time now on the box in your bloodstream cleaning your cholesterol being trialed right now difficult to try with humans obviously brain computer interfaces augmented reality bionic limbs self-driving cars vertical farming the internet of things so the question is no longer if or how but who and why and that's the question we have to ask when we talk about automation robotics yes we can do this but why and who and where and what is the destination because in many ways you can say clearly it's inevitable right I mean that there's no doubt about that that's kind of like saying that you know you like physical music on the record or CD but you know that that's not gonna happen right it's digital it's in the cloud it's not gonna go back to physical just because it's a better business model for us so that's an important question so I want to introduce one of my key new words I'm working on the book on this topic and this is one of the keywords I call this the humor rhythm and that is essentially is kind of a paired up with algorithm so because we're always talking about algorithms and what they can do but I want to introduce a new term of humor with them which is basically all of these things you know the things that make us human and it's very interesting to see that most of those things cannot be nailed down into zeros and ones like randomness mysteries imagination intuition creativity you know right brain stuff basically and you can clearly see when you're looking at job profiles today who companies are looking to hire it's increasingly moving to the right brain it's either all the way on the left you know scientists and technologists which of course have a right brain as well but primarily on those kind of skills and the right brain moving in that direction right so now it's actually becoming a question of all of these really complicated things ultimately the value of what we do will be defined very much by this in the future to figure out how that all hangs together Apple is a great example Apple got into the music business again with streaming and the news business with a new release of the news app and Apple is saying well it's great if we have an algorithm that can determine what's important for Gerd on for whoever right that's good like Pandora for music but we're also going to hire 200 journalists 57 DJs to create human stuff because of course they have the money too right so because humans are expensive that's one of the realizations that we have to come to humans are expensive technology is cheap so here we have a situation where we clearly are seeing Apple will make all the difference by the people they're going to use smart technology of course just like spotify anybody else but investing in people so our question I have for you is our society ready for this right here's a short commercial from a Dutch insurance company I think they're sort of nailing it why this is happening and I think you'll enjoy this one the all-new self-driving car it does the driving for you so you can catch up on the more important things in life it automatically takes the right turns butlessly avoids unexpected obstacles and recognizes red lights far in advance ensuring you are perfectly safe journey well you get the point right this technology is pretty much ready not entirely but are we socially ready for this do we have the context for this that's a that's a big question so that is a question we have to answer before we roll it out because as we call this in Europe the precautionary principle would apply right we have to make sure that when we're doing this we don't cause too many negative consequences this is not as simple as just saying let's just do it and people will get used to it so something to think about before we do this so we talked about this in the beginning now we have basically everything you know things stuff hardware wet wear which is us right being made intelligent smart farming such an example did you know the number of people employed in America and farming has gone from like 42% to less than 1% in 50 years and in five years will be 0.1% because of smart farming but the number of the stuff the food being produced right has exploded it's a mind-boggling amount of productivity smart farming the Internet of Things everything being made intelligent lots of people estimating roughly in 10 years we may have as many as 500 billion connected devices pipelines network sensors cars everything very intelligent devices that this is a slide from Ray Kurzweil's book saying 2027 we're going to actually have that sort of capability of the machine brain to match the human brain so Ray Kurzweil is saying that humanity will be hybrid by 2030 meaning that we're going to augment ourselves you know for example through 3d glasses virtual reality implants brain computer interfaces James Barrett who wrote a book about this you should read called the our final invention about artificial intelligence very good read on this but essentially something to think about just a few days ago was announced that a bunch of guys have hacked the Jeep the Chrysler model so in various types of Jeeps actually to take remotely control of the vehicle because of the onboard connected system so they can do stuff like operate your windshield wipers you know squirt water the whole time honk the horn and disable your brakes was a contest basically a bunch of hackers so now Jeep has to recall 1.4 million vehicles because their system the electronic system is completely unsecure right so the other thing that's happening here is that on this exponential curve we're going to be at threat level severe right I mean you can only imagine today the connectivity of people that's bad enough you know if that information goes out but if we connect our cars our health care our banking our digital money you know our education everything around us if that is also connected and we're not really sure about how that's being kept that's not a good idea so if you're in a security business you know this is a huge opportunity because basically we're looking on the scale of 1 to 100 we're at five now in five years will be at 50 so this is crucial that we think about what that means and for for the future so what we have here is basically coming together very big and fluid data predictive analytics as what we'll see this afternoon I call this basically business super intelligence in this stuff you can do today using those kind of engines IBM Watson or even Radiant Sakes and those social media things right one person can get the intelligence of a hundred people team from five years ago and finding out in real time what's happening about brands and what people are saying how they should be upon respond I mean we're going to have this kind of business super intelligence and and this is a slide from Liberian that makes sense and that works for environmental control basically connecting every single piece of our environment to a grid resulting in huge energy savings together with a switch to solar energy this could solve the energy problem I mean we're actually there where we can we can say well clearly this is now possible so what's happening here however this kind of super intelligence requires super humanity because imagine what happens if we use super intelligence to its ultimate effect and we don't have humanity then we're stuck in a system that we basically can't control or we don't feel good living in this is a very important point we'll go back to that in a second bottom line is this and the end technology does not have ethics right there it's a machine technology we have to inject that into it in some form we'll talk about them we talk about the stuff in the right after this talk our society depends on those things it's kind of interesting to see that actually 95% of transactions that people do are not based on facts buying stuff is the greatest example at the entire economy is based on illogical irrational emotional and subconscious choices and we're going to solve that problem with algorithms I think we can use the arguments to make it better and more efficient and organize it better but there's something that we're going to miss if we just use the algorithm and then we have this on top of all of these things that's happening behind the scenes we have this right we're going to be augmented in visual terms it has been tried years ago you know of course Google Glass right to actually use augmented information that we put on a visor or glasses and it was kind of clunky didn't have a social purpose really but now there's over a hundred companies that do this Microsoft HoloLens if you ever get to try it you should try it Oculus Rift Samsung HR HD stuff right it's mind-boggling we're going to see this for doctors for policemen for trade shows for check-in here at the hotel it's going to be second nature like SMS like what's up every single policeman in the world wants this kind of gadget they can see who you are they can recognize your face they can pull up your records as you get out of the car so that is going to be augmentation virtualization simulation becomes completely normal this is kind of stuff for like games now you know people like to use in games but imagine using this for education going inside of a virtual world to play a business game that already exists but it's clunky that is going to be a future that most of us will see augmenting ourselves to see further and augmenting in the sense of wearing something you know initially because that's still outside of the body intelligent assistance I turn this around and say it's not really AI it's IA right in fact I think that's a much more appropriate term intelligent assistance intelligent augmentation intelligence amplification using what we do but make it quicker faster the FT says we're going to have roughly 8 billion dollars worth of revenues in that not very much I think it's gonna be a whole lot more than that in just a short time but Schwab already has a portfolio called the intelligent portfolio it's essentially a robotic advisor of course we'll talk about that this afternoon this morning with IBM but many of those things are now becoming possible because you have a real-time data feed of a hundred million different sources every single bank that's in the lending business is investing in intelligent portfolios those idea being if you have simple investments you can probably do it with a robot and Frey and Osborn who did a great starting you should download from Oxford University saying that roughly 40 to 50 percent of jobs will go away they're saying 58 percent of financial advisors will be replaced by robots and AI I've tried some of those systems it's pretty mind-blowing what they can do they're not human in the sense of saying that I don't want to invest say in defense or something so they wouldn't care right they just go for the numbers and they don't go for sentiments but they could do simple stuff and they're going to get exponentially better and all the stuff that you probably already do on daily basis Siri Cortana Facebook money penny it's a new project by Facebook intelligent digital assistance I don't know if you've tried Siri on your iPhone or Google now on Android phone I mean the stuff you get from this is pretty mind-blowing you can already speak to Siri the Apple device and say you know send an email to XYZ pull up this information turn on the radio play rock play rock music and Amazon just launches a new box called the echo that you can buy you put it into your living room and you speak to echo like you speak to a person and it will play music it will queue up videos it will reorganize your library will do all that stuff on demand intelligent it says they're going to be as cheap or probably even free and big large-scale operating systems so you can say we're moving into a world that's anticipatory prescient predictive some people say even pre-cognitive you know being able to decide for example police departments in several places in the US have already defined a group of people that are likely to commit a crime in the next month and they go to their house and offer them therapy not a joke Sam we have identified you as a high risk so this is already happening imagine if you go to your if you're a bank you go to your clients you say no I've looked at your portfolio and our engine says you know there is like you know 74% likelihood this is not a good thing what we're currently are doing of course a person could do that but having all the information in real time like every 10 seconds with an update that's really powerful stuff you know a doctor making the rounds in the hospital having IBM Watson next to him and looking at 158,000 cases of exactly the same cancer then he has in front of himself right there with the patient right that is vastly more powerful than having to go back to this office and Google for stuff right I mean we're talking about a doctor with a digital assistant would be so much more powerful and freed up to actually talk to the patient because the assistant would do all that work you know write the prescription look up stuff file things so if you have kids don't let your books but your kids become bookkeepers financial advisors truck drivers fast food cooks and those kind of things we're looking at a rapid of course you don't want to do that anyway your fast food cooks is not a very popular job but but in America the fast food environment is a last resort for a lot of people you know who are out of a regular job they go to Burger King for six months to make money that's a very important part of the food chain actually in the over economic terms UBS has already invested in artificial intelligence of various sorts Schwab is already in that so it's basically just a question of time so we're going to do our first poll so please pull up pull out your app pull out your mobile weapons please so basically you have one choice here are the choices and if you go to the session for today you have the app yeah you guys have the app actually loaded I hope so otherwise we can just do hand signs full old-fashioned way you can choose one and just tell me how do you feel about the rise of intelligent digital assistance just what is your opinion on this and let's can we switch it on I think if you have the app then you can see the choices there anyway you switch the screen okay all right interesting okay it's reordering actually by priority I see okay this is just a way to capture the sentiment in the room and also for discussion later we'll have one more of those later but it's very interesting to see here right it can't wait I can't wait is a very high pyramid here I get this a lot and it's really interesting in Europe it's the other way around people saying it sounds interesting but also very scary I'm not sure what it will do to my life will it possibly deplete and cause dependency so the second one here it sounds what is the second one it sounds very promising as long as we don't lose our capability that's kind of a middle path right so we like to take the middle path that's actually quite good but the picture is pretty clear here in this room mostly positive I would say we'll go back to that in a second let's go back to my side space all right so basically what's happening here is that these things are reframing our lives are literally reframing creating a different context automation robotics artificial intelligence and they're reframing everything not just business I mean that's why I'm going to give you here the what I call the seven Asians they all end with Asian of some sort when you download the slide you can dig in deeper but basically the seven Asians are digitization and dematerialization which means for example movies are no longer on DVDs they're in the cloud books are no longer books they're in the Kindle and automation virtualization which is in your cloud computing sales force and those kind of things optimization augmentation which means changing humans to be more powerful and robotization when you look at the seven Asians and looking at examples of this then you're basically saying wow now if all is happening at the same time it sounds a bit like a nirvana for companies running businesses because for example if you ran a call center put in those things together you can say clearly I'm going to have a lot less people work in the call center I mean that's it has been tried for a long time but it's actually finally happening there's a great quote by Hemingway who said how do people go broke gradually then suddenly and it's very interesting to see it that really applies to technology because a lot of us are basically looking at this like paperless office or media in the sky in the cloud and those you know didn't happen for a long time but when they finally happen it's huge gradually then suddenly that's exponential right so looking at these things you know if you're if you have a call center you know what's going to happen here technology would get so good that 92% or so of your calls can't be handled by software so that brings up a lot of issues possibilities for example is a whole idea of cloud computing basically this business model this is from the economists from last week saying that every single business is moving into the cloud regardless of the risk because it's competitive so much better it creates entirely different possibilities and then with cloud computing of course the biggest problem is how do we actually make this work on a large scale that is not as insecure as our email or Facebook this is a major challenge that we will have to solve and some of the consequences of this are as follows at first dependency as we're traveling in eyeballs in Zanzibar a year ago which is the east coast of Africa by Tanzania and I went with my son who was 18 and was sitting on the beach and of course he wants to play music on kids always want to play music I'm sure you're aware of that so we're sitting on the beach and he push on his mobile keeps pushing and pushing and pushing and nothing happens right and so what are you doing with it well my mobile is broken I can't get the music to play turns out his music is not on the mobile in the cloud right and there was of course no internet on the beach in Zanzibar right first time in his life where he was not connected to the music cloud and he didn't understand the problem it's like air like like oxygen it's like I can't breathe you know let me hit the button imagine if we get connected in such a way dependency will be huge because we're going to be depending on all of that connectivity just like the cloud will be something right I mean the self-driving car in its ideal case gets one terabyte of information a minute the car will not drive if it doesn't have data we'll just sit there as opposed to human I'd say a huge challenge imagine you're driving somewhere in Finland and you know all of a sudden you're out of the reach of the network and that's it right you have to go and collect berries in the forest somewhere displacement of jobs from the business angle that's you know the less people I have the better clearly but societal angle will make that quite difficult if a company that runs call centers can fire 90% of the staff should they be required to retrain them or should they just keep the profit and move on I mean these are these are huge questions that we're going to have to answer and the last one is this most important for you rabbits not kidding abundance automation is a tool for dramatic cost reduction and it generates abundance the more you automate the more abundant the service becomes because clearly when you automate it has to get cheaper not just for you but also for the clients and it creates abundance which means that it's all available for example if you spotify the music service or YouTube Spotify has 16 million songs on its service and you pay seven dollars a month so the problem Spotify is not the music it's a selection of music which music are you going to pick as a huge challenge and think about that for a second if somebody is going to sign up with you as an outsource technology provider if this technology prevails everywhere you're just one of the provider of an abundant service it's like in telecoms where I do lots of work everybody gets your phone call and fairly cheap mobile broadband when that becomes abundant what are you going to say about your service you're going to say well it's even cheaper then you have to start paying people to use your service it's already very cheap so what do you do then you have to add values I mean Spotify is a great example Netflix right the most abundant movie service in the world now 72 million subscribers abundant you can watch anything anytime anywhere the Kindle Uber Uber has just launched a group service called Uber pool in San Francisco you can now go to San Jose for like six dollars and fifty cents I mean you can't even take the train if there was one you can't even take the train for that little and now it's becoming abundant transportation I mean jet smarter you know you guys know jet smarter you can take a private plane that's Uber for planes for one tenth of a regular you know it's of course you don't want to get started on this because you get used to it but that 3d printers abundant anything shoes plastic covers you know whatever you want to print so what we're seeing here really is a situation that Peter Diamandis has pointed out we're going because of this demand and supply all of us in business are going to one destination that is abundance it's much harder to be abundant of course with say diamonds for example right or or energy or oil because it's physical but money for example banking tourism services outsourcing software becomes abundant because we're automating so at that point you know when we reach this point we have to think about for example in the energy business you know looking at the price of solar going towards zero the price of oil also declining basically means abundant energy by 2035 hard to imagine what's your business going to be by then there's a great book by Peter called abundance which is very blatantly you know techno optimism but you should still read it it's a good read to think about this topic so let me summarize an abundance that automation is a tool for abundance it ends carcities and that that's a certainty in many ways it's good because when you end certainties you can then yes carcities you can also invent something else because it also lowers the prices and margins and that's not always a good thing I mean clearly in the music business you wouldn't be so happy about the margin of a song having declined from the city to the stream so this is important point to generate new values you will need to focus on things that cannot be made abundant this is the key point when you automate things get cheaper that's great for you great for the customer and then what do you do you invent new things that are only possible because of the automation and those are the ones you're going to make money on that's a key point it's not automation itself that will make you lots of money in the future that's just a tool to get to this point where you can think of other things that are not automated unlike algorithms the humor rhythms for example cannot be automated anything that's human about your company purpose design brand becomes much more powerful cannot be automated some people have said happiness can be automated and ultimately the purpose of business is customer happiness so there has to be something in place there that makes it possible for you to go beyond abundance because in five years maybe eight or ten depending on what business you're in we will reach what I call total efficiency that basically means that every all the all the stuff is taken out that makes it inefficient and until then you can make lots of money with efficiency but then you have to think about purpose and human values and other key business assets so this is a very common thing when we talk about automation right you want to reach maximum efficiency level that's good but let's keep in mind this is just a path it's not the destination it's a good path to take a path you have to take because it monetizes right but it's only the first step what comes after the efficiency what comes after the possibilities of saving money so I made this pyramid which I think is showing it pretty nicely it's that automation digitization you know the seven Asians as I call them right being at the bottom of the pyramid they generate this and they basically kind of move around a little bit depending what business you're in but the ultimate way to monetize what you do is on top right it's the purpose why you're doing stuff who you're doing it for how you're doing it what do you stand for 82% of millennials the latest research shows care about companies whatever doing the right thing right being the right thing having the right purpose they would rather buy from a company that does that they're not very important point of think for our future so talk about jobs a little bit and then we're we'll go to what's the end so definitely what's happening here unlike anything before robots really will mean a lot of jobs getting lost my view I mean the compound effect all the stuff that's happening I was just in New Zealand and just as I was leaving I was looking the newspaper and says announced today no more people cleaning Auckland Airport it will be all robots rooting around and cleaning the airport and laying off half the people who used to clean this is happening in the aspect of society in Freiburg in Germany I'd go to a restaurant a lot and they recently they switched those associate restaurant that they they fired half the staff and put iPads on the table you ordered the iPad and then people just bring the food no more discussion about the food that just you order it and that's it right saving wages to which Martin Luther King already said years ago right basically what's happening here is this will probably eventually lead us to a guaranteed basic income guarantee called the big basic income guarantee which will be extremely difficult in the US for lots of reasons in Switzerland we have this on the ballot already this year I mean there's only seven million people in Switzerland right we could afford it but that's a very tough question how will this be done in a large country like India or I don't know but so technological unemployment this time it's real so that means change in education change in HR because basically then after the dramatic automation that is coming that we're all a part of obviously everything that cannot be automated will explode in value so the first wave will be automation the value itself will be in the automation clearly because there's lots of things to be cut out with automation then afterwards the second wave will be those things that cannot be automated like empathy intuition imagination more right-brained things even though that's a very old-fashioned way of looking at it but basically the right-brained stuff that we're going to add to that in the future so I'll give you a short video and then we'll wrap up basically it's a great video you should watch on the you may have seen this on the web it's been around for a while it's called humans need not apply and I'll give you a short excerpt about humans being the next horses you understand after you watch this imagine a pair of horses in the early 1900s talking about technology one worries all these new mechanical muscles will make horses unnecessary the other reminds him that everything so far has made their lives easier remember all that farm work remember running from coast to coast delivering mail remember riding into battle all terrible these new city jobs are pretty cushy and with so many humans in the cities there will be more jobs for horses than ever even if this car thingy takes off he might say there will be new jobs for horses we can't imagine but you dear viewer from beyond 2000 know what happened there are still working horses but nothing like before the horse population peaked in 1915 from that point on it was nothing but down there isn't a rule of economics that says better technology makes more better jobs for horses it sounds shockingly dumb to even say that out loud but swap horses for humans and suddenly people think it sounds about right as mechanical muscles pushed horses out of the economy mechanical minds will do the same to humans not immediately not everywhere but in large enough numbers and soon enough that it's going to be a huge problem if we're not prepared and I leave it at this the whole thing is 50 minutes long you should watch it it's obviously rather pessimistic on the future of jobs I don't actually agree on the last part you know I think what we're seeing here is that lots of jobs are really robotic to begin with they will obviously be gone right but there's going to be so many new jobs as well for example in technology and science as well as in the interfaces for example augmented reality virtuality and design intuition delivery of business models entrepreneurship it's still gonna be a pretty hard shift for those that have those robotic jobs right to lose them that's a that's a true challenge so basically we cannot allow technology to trump humanity and this is Descari to came up with the idea of animals being machines he called them the the the the automata which is basically you know creating an image of a living organism as a giant machine that would have no purpose for us I think we need to look further and also ask this question what should or what should not be automated very important point not everything that can be automated should be automated for example you take a giant engine and you filter all the traffic and results from your human resources department and sales you know if you have a big organization you can get a couple hundred million records right and then you push a button you say who should I fire based on this information what that's already being done can be done is that right I don't think it is right because there's many things that cannot be automated in the system of value in companies yeah what does that person do what is between the lines what is not actually email transfers or linked in postings or whatever you have right that's like saying when I read a trip advisor review I go to this restaurant it'll be a hundred percent good if trip advisor says it's a hundred percent good we all know that's not true because it's relative it's good but it's not a hundred percent for example experiences you know we're moving into an experience economy and it's been said for a long time it's actually finally becoming true experiences are much more powerful than purchases and so in this world we're basically saying well we are not really able to automate experiences so therefore they become really valuable and so your customers experience with you is the most valuable thing because it cannot be replaced by machines or by a process it can be aided by machines it can be supervised by machines it can be innovative by machines and algorithms that but it is a physical it's a it's an actual human experience it's a relationship basically this this chart shows when you download it's a progression of the economic value is moving towards from the service to the experience and so what we need to do in business is we have to innovate in the service economy which we're discussing today and that is definitely going to happen it's very important huge potential there and then and then we have to innovate on the experience economy or better yet both at the same time so the algorithm and the humor of them for example the quantified employee you know about that idea right basically quantifying people for their performance on work I think it's interesting but it's probably as interesting as saying that your Twitter score is 62 percent or whatever right that is interesting but what does it actually mean you're going to hire somebody based on how high their cloud score is or their peer index or you'd never do that you do that for for a typist or a runner you know you wouldn't do that for a person that actually has human value it's just a data point that you use and it's very important but anyway so we have a second poll and then we'll wrap up these are the questions so pull out your weapons how would you feel about humans becoming artificially intelligent that's the extension of the first question how would you feel about if there was actually a way to augment ourselves to become more powerful physically with implants with glasses with augmented reality with changing your body with taking certain new tropics with with pills with physical things whatever the the task may be oh I can we switch okay I gave you a good way out here I was too generous with the answers I suppose right anyway the biggest the biggest bar here is once again is the it's inevitable and just the next step the second one is that we should embrace it but to find clear borders personally I myself I'm on the green bar here pretty much I think it's kind of inevitable but what we need to define what it actually would do and why and how right to actually go in this direction a little bit off time so let's go to the next slide and then we'll go back to this in a second and push them up as well so clearly now this is a future we're heading into I machines taking these jobs and I think this study from the Economist which is a study on disruption by robots great study should download it's free basically says that we're moving into a direction to where jobs will increase the demand skills in creative problem solving and in right brain situations so here's my summary basically successful organizations have to master both algorithms automation technology robotics AI and clearly you know right now we're kind of looking here because it looks like it's a saving thing right it's an efficiency drive it works and that's a good thing not putting that down and ultimately we have to take another step further and say what did we look at the numerisms at what we stand for what happens after automation or along with automation and they're actually very closely related so that's an exercise we have to do because ultimately of course this will also make us stand out as a brand in a whole different way so quick summary first the future is exponential combinatorial and interdependent you try to be independent and linear or behind the wall extremely difficult apple can do it that's pretty much all the only company I know of that is successful being behind the wall or maybe linked into some degree so the sooner we can adjust our thinking and think laterally the better so when you're thinking today for example when I speak in Switzerland and people are saying well that's all nice and fine but you know we can just wait and see I always see wait and see means wait and die because in an exponential world you cannot wait and see because things are too quick to catch up after you recognize them we're looking at artificial intelligence maybe look at intelligent assistance first that's a very good interim step you know how can you define product and services that are intelligent augmentation of what your customers want to do I think that's a very powerful choice for the future efficiency and cost reduction is a is a good story but the final destination is to go beyond the seven nations the inevitable abundance and create new values that cannot be automated we don't just need better algorithms we also need stronger numerisms principles values social contracts in the end business is a giant apparatus of a social contract aided by technology uh ellen k is a good quote on this that I want to finish with he said the best way to predict the future is to create it and that's what I wish for you thanks very much for listening and I look forward to our discussion thanks