 Good morning Confidence have become a little bit like rock shows, you know, I used to be a musician and producer Playing the guitar and now I speak in front of you, but the music hasn't changed. So it's really interesting So I'm gonna show you the future a little bit now Good morning. It's a great pleasure to be with you today Sunday is a perfect day to think about the future. Wow. That was pretty long bread. Where's bread? Was that correct? You speak? So This is an app called say hi, right? It's a real-time translation app. I was in Japan three months ago I was at the sushi at a sushi place and we were talking about stuff and I spoke in German into the app and the sushi chef spoke to me in Japanese We talked about half an hour, you know, really simple things, of course, right now in the very near future You'll wear an earpiece and you will not be actually holding a mobiles So and you can speak in real time in 30 languages to anybody in the world So that could be heaven You know, you could marry a woman from Vladivostok or you know, some whatever, right? Hey, I could be held also because our kids would say yeah, you know, why do I learn languages? You know, I just yeah, I'm not sure that's a good idea But you can see that the future is already here. It's just unevenly distributed as my friend William Gibson likes to say Science fiction author, so I'm going to share with you today some future principles if you have received my book Technology manatee. There's many other principles and rules in here, but these are sort of customized for you guys So but take a look at chapter three in this book So first of all, what do I actually do? This is my job. Yeah, I Don't predict the future. I observe the future There's a very big difference You could predict the future 50 years ago Alvin Toffler Arthur C. Clarke Maybe Ray Kurzweil, you know recently, but to predict the future today 50 years from today It's virtually impossible Because everything that we have known in the past has has become real Not everything but almost everything and the next 10 years we're going to invent stuff You know science is making leaps that it's just unreal Solar energy great example If you invest in a solar energy 10 12 years ago like I did you lose all your money But today solar energy finally there's been so much innovation. It is the next big thing in energy It's going to be the end of oil It's a strange thing to think about this imagine what that would mean for the Middle East region You know no more oil to fight about But observing the future is really what I do and I start with the first principle right here Assume less discover more There's so many things that we look at at what we do because we are successful Otherwise we wouldn't be here, you know, we're looking at this and saying all the future is going to be like today Maybe faster more complex, but pretty much like today But that's not true The future is already here. It just we have to pay more attention to things So if you look you know, I wasn't a music business. I was a musician and producer. We sold records All right, allegedly, that's how we make money and of course playing concerts But what's happening in the music business today? We don't sell records Spotify has for $10 21 million songs Music is free Basically You make some money from Spotify, but basically music has now become a whole different logic. That's about marketing advertising licensing gigs synchronization So we have to pay attention to the future you should spend at least 5% of your time looking at what is not already here And this is difficult because we are already a hundred fifty percent working on what is here and just to get things done But you know, I work around the world I live in Switzerland But everywhere I go, I can observe one thing a company that looks at the next five years as part of the plan And it's ready to reinvent. They're always ahead always doing better The second point I want to make is you know people are worried about the future these days It's it's kind of a strange thing the last two or three years when you talk to people about the future. There's a lot of worry in Europe we worry about climate change a little bit of that here as well It's a huge discussion, but the more bigger worry is this one robots Will learn everything they will take our job First and then they will come and kill us This is what Hollywood tells us basically Anything for black mirror to X machine. It's always gonna look back. You know as terrorists. There's robots There's there's disasters that the future is not good and nothing could be further from the truth You know as I like to say the future is better than we think I mean It's actually amazing what technology can do for us. You know what is a kind of accomplishments as huge issues about what else it does Of course, right like privacy and those kind of things But primarily it's positive. You know reinventing of energy Cheaper more efficient technology is pretty much everywhere cheaper healthcare. Maybe in 20 years solving cancer I mean, it's all like it's not so far away. I'm going to live to see most of those things happening We just have to do one thing. We have to govern technology wisely That's not going to be so easy because technology becomes so powerful, you know, what are the most powerful companies in the world today? Not oil companies gas companies, maybe the military or the banks in Switzerland the data companies The digital companies are the most powerful companies in the world and they are your future competitors Because every business they're in they go on just a little bit to the left or to the right or the top and they're just moving up in the food chain like this I mean look at Amazon right Amazon is actually starting the logistics company. I Know if you've read the news But you know next thing Amazon will do is like fires to the mar to Mars or something I don't know but you know Amazon is in banking Amazon is going to be an insurance with Berkshire head away fund I mean it basically going like this In China this company called Alibaba, which I'm sure you know They're in 65 businesses Alibaba is so powerful in payments now that in Switzerland where I live all of the restaurants have to have Ali pay Otherwise the Chinese will not buy anything because they can't pay Or they'll buy something but they won't pay Using Ali pay. It's pretty funny You know when when you're on top of a mountain, you know just in nature in Switzerland And there's a Chinese group and they don't speak any English German French, whatever right, but they have Ali pay It's pretty funny. But anyway, so this is the first principle That's not think bad about the future No matter what you think about politics or environment or so there's so many good things that we can think of You know, we just have to take a look and find out what it is The bottom line about technology is this Technology is morally neutral until we use it It's always been like this the nuclear bomb Now we were able to build power plants from the same technology Whether that's good or bad. I'll leave that up to you But you know basically technology can be used in different ways, you know, I Mean people are addicted to television. We don't make that illegal We use the car that kills two million people a year So the good thing about technology is they can really change things, but we have to keep an eye on what else it does For example the smartphone Extremely useful. I Call this our external brain our second brain. I Bet many of you don't even know the phone numbers you have in here Even the close relatives you have by heart. You just keep them in here Because you know, we've outsourced this so there's now our phone numbers. It's our banking. It's our dating stuff for some of us It's it's music. It's money. It's everything in here. Imagine if this thing becomes more powerful and Does all kinds of things it could be like like a copy of us And then if somebody gets your phone, you're in deep trouble Because you are in here So we have to keep a good eye on how we regulate technology and you know who is responsible and you know I work a lot with the big tech companies and I keep telling them that whatever they're going to invent They will be responsible for it. I Didn't used to be that way because it wasn't really working, but I mean your Facebook is a great example Two and a half billion people. It's the biggest country in the world and Zuckerberg is the president Mean the power their Facebook has They're gonna have to be accountable, right? I Mean imagine if you you have an organization of that size and then you say, well, I don't care what happens and make a lot of money That's kind of like you gotta think about that So sometimes I think about this, you know in the context of Facebook and it's quite clear from a European point of view You know Facebook sort of gunning at democracy Because you know social media is something we can easily use to manipulate which is not bad, but it's about advertising Oh, it's a big topic. I'll get back to that in the second. So the third point is this Humanity it will change more in the next 20 years than the previous 300 years And you know, but some people are saying well, that's you know, you lived in California too long It's a hyperball, you know But think about this for a second 300 years ago before that was a you know the printing press and then we had the industrial Evolution then we had nuclear power and the internet and telephone. Those are all very big things Mean in this country 92% used to work in agriculture 2% of people You know how much it is today? 2.5 That happened in the last couple hundred years, but now the big thing is technology is changing us Technology is capable of changing what how we think and then very soon You can have little nanobots in your bloodstream taking care of your cholesterol. That's already in the process of approval You can connect your brain to the internet brain computer interfaces You can use virtual reality like Microsoft HoloLens or Oculus Earth and you can become superhuman I mean who in this room does not want to be superhuman. I Mean as a supply chain manager, you wish you were superhuman all the time anyway, right because it's complex I mean imagine you were Tom Cruise a minority report Remember that scene where he goes inside the data and just you know like this Well, you can do that with HoloLens, right? I mean it's it's $6,000 and it's not you know, it makes a little bit sick, but you know just think two or three years Yeah here and Then when you're wearing this thing at work, do you think it's gonna be interesting when you get home? You take this off you're gonna say wow you guys are so boring, you know, I'm used to my superdrive, you know my virtual environment Up a huge challenge So I would say that's about 90% good and 10% worrisome We have to make sure the 10% don't go to be 50 You know so that we get so used to it that we can't live without technology I mean imagine this you know the other day I was in Tanzania in Africa with my son Who's not who was what was other day three years ago? He was 19 And we were on the beach in Tanzania and he's hitting his mobile phone desperately and wants to get the music to play And was the first time in his life where there was no internet And he was going like my phone is broken. I'm saying no there is no internet here, right? No music no cloud no network If it's not on here everyone play It's like what? You couldn't imagine that there was a place without the internet It's my daughter. I mean we're moving into a world. That's going to be dramatically different and the primary driver is this Moore's law the exponential change And many people are arguing that was laws ending because of the chips and all that but basically what's happening Is where the takeoff point of this curve? Well, when I started in tech, you know, I was a musician producer and then I went into digital music I was here At the beginning of the curve it didn't matter what we were doing. It wasn't ready Remember the paperless office Napster downloading music was just okay. It will work, but it's going to be 20 years So, you know, we've tried to 22 million dollars until we found out we couldn't do what we were doing because it wasn't ready But today you can safely say now we're at the takeoff point, right? We're at the pivot part. So the numbering is really interesting, you know, four eight sixteen thirty-two If you go a little bit up the scale of five years Seven years through the X You go up the scale 30 times, you know where you get to 30 times up the scale one billion So in 40 years roughly, we can live in a world that's one billion times as far as today in terms of tech That's hard to imagine So I take this long list of things. I'll talk more about them in detail, but let's just take quantum computing The idea of having a super computer a 3d computer that does not use transistors, but lives in a gas cloud IBM Microsoft many others today that machine is about 300 million dollars and There are the first ones that have the same computing capacity than the human brain 300 trillion calculations per second Now that machine will become the new normal and you can go through your mobile phone to the cloud and run your DNA Your genome in 10 seconds That's that'll be our reality in a very short time. So when you're on a date, right? You think you're you want to go a little bit further later on you you can check your DNA to see if it's compatible 10 seconds today takes a week So linear thinking is a bad idea, you know linear thinking means I'm expecting that next year I'm going from four to five to six to seven, you know, that's what humans do That's what we do Do not expect the world to be linear it because it has ended I mean the first couple steps one two four is like one two three. There's not much of a difference but now And this is crucially when if you're in supply chain and logistics or warehousing or Manufacturing because we're talking about scientific progress at a huge scale And sometimes actually so huge we can't manage because we're linear So here's a key question you should answer tonight when you have a minute They sit by the pool say what will my company do in five to seven years? Because the answer will be that in most cases revenue streams are now changing every five to seven years 50 to 80 percent I mean look at Apple 67% of what they sell now as iPhones 2.4 billion sold Didn't exist eight years ago, and this is really happening all around as the German car companies. I work a lot with those guys They're all shifting to saying well, we don't sell cars We sell mobility Because in 10 years people like us yeah, we may still buy a car But you know our kids are probably gonna do a subscription to a car a Spotify for cars That's already happening in the US also Or they may decide not to have a car at all and just use the right sharing I Mean if we don't think Exponentially we're going to be left behind so that is really the first key point here So for example mobility is makes a great example from ARC investment here on this slide There's two key trends. We're going from gas fossil fuel powered to electric And we're going from human driven to autonomous And you could say yes, you know that's Not true everywhere. It's a cultural question. I mean the US is a car a car culture and so is Germany But in Switzerland where I live We all have cars where we don't use them Because we have amazing public transportation first class too So it's actually much quicker. You know, there's two more things. I want to add to this hydrogen cars I think Toyota is heavily involved in this And assisted driving I I would put my money on assisted driving not an autonomous driving. I Think assisted driver will be absolutely huge because it's it's possible. It's doable totally autonomous Like rainbow does in Palo Alto, you know, I mean in Palo Alto in the suburbs a five-year-old can drive, right? It's huge the streets and there's nothing happening and I mean Yeah, okay, so I have the bot drive, you know, but take the same car to Rome or to Beirut or Jakarta You're gonna have an accident as soon as you get in the car So I think that's a really interesting trend if we're looking at the future of those kind of lens, you know This huge transformation. I mean imagine if your Mercedes Benz. You're selling fancy cars to people like us For 150,000 or so a piece and three years later the same car is worth 50,000 And that money gets made by everyone in the food chain now With a subscription to Mercedes Benz Gone where's that margin is just gone because I'm gonna pay about 1,500 2,000 a month And I can get any car I want and that whole margin the 100k is just no longer there So we have to think about what happens here and where it does what it does for us So on this slide you can see this is a demo by MIT You know how the world would change if we actually go ahead with all these ideas like autonomous drug This demo shows What happens in a city on an intersection that's fully automated in a fully autonomous city that would be traffic lines No street signs No stopping signs because the machine would know everything that goes on which is flawlessly planet Remember Blade Runner, you know the the first one the good one not not the latest one You know that the the electric the vehicles are just flying like this That's because the computer will make the intersection so fluid that you would never stop at the intersection Would just be like needles, you know, and if you were human in this city you couldn't drive I mean there's no way a human could fit in here because a human would be the factor that makes it all break down So this is really interesting, you know, we have to ask the question. What if What if we can do this That's the question that gets us to rethink to transform what we're doing So when I was in the music business where we talked about music moving to the cloud and Now you can see that basically the only chance for the future of music is the cloud I mean anybody here still buys CDs. It's okay. You can out yourself You know when these days, you know if you buy a CD or DVD and you give it to your kids for Christmas They're called a therapist. I Mean, you're hopelessly outdated It's $10 for 21 million songs on Spotify And you know how many people are subscribing to Spotify a 110 million people are paying Remember five years goes. We used to say what people will never pay for that music is free I'm the 10 million Netflix. Same thing. I mean you can download stuff a bit torrent If you like games of Thrones, you can get that anywhere, but now it's yeah, Netflix is good So really what's happening here? This is the principle of the future gradually then suddenly In other words, you don't see anything for a long time because it has to get to critical mass but when it does boom, it just Explodes and This is why we have to get good at understanding the future As I like to say jokingly say the future used to be out tomorrow about tomorrow and not another features about next week That's basically Coming at mind-boggling pace point number four Business as usual is dead or dying So doing things the way that we used to do them They still work because you know that critical mass hasn't been really reached and so on But you buy and large you can count on that to be exactly like the music business. I Mean if you plan today is to open a CDs shop, you know, then you're in deep trouble Bookshops right book shops are still there because people love physical books They buy six times as many e-books on Amazon, but they still buy physical books at the airport folks up But you know processes are changing so quickly it's mind-boggling. I mean it either dead or dying So here's some examples, you know, basically we're all going to wear music and the Transportation so it's gone. So the military banking and so on In banking is next in that chain of of change, right? And you know, many people have said for example military defense 80% of what we're gonna spend on military in 10 years is digital. I mean mind-boggling change as to how that will go Spotify great example is as I said earlier banking 74% of kids are saying if the digital companies like Google Facebook Alibaba if they have a financial product I go to them It's a scary thought and this is happening across the world now here in your turf The top areas where businesses are driving revenue from AI Supply chain 42% of businesses think they can drive revenue from AI artificial intelligence And of course, that's a big topic on this conference. I'm sure About that as well Well, we have to think about what I call smart everything You know if I look on the list because I talked to lots of different people the least Forward-looking in terms of their process having changed in the entire world is construction They're still building in the same way and then we have things like, you know banking That's also that just now moving in supply chain logistics is actually in the front of this a little bit And that's a very good place to be because the change will be absolutely mind-boggling But look what Amazon does here They take all the tech that's available Radio frequency ID chips near field communications and they build this store called Amazon Go They're going to open 3,000 stores in the US You just walk in with the Amazon card or your Amazon on the mobile and you don't actually see anybody You just take what you want and you leave of course you do pay inadvertently, I suppose But I mean this is a mind-boggling shift So I want to introduce you to seven game changes and when you download slides later You can look at what the first one is that data is absolutely everything Data is driving business every business is moving into the cloud The Internet of Things is connecting everything outside of the mobile and the computer Processes logistics and so on everything is becoming smart I wouldn't call that intelligent just call it smart. I'll tell you later why and we can compute everything You take those five things I'll show you two more, but you took those five things That's already a huge shift because all of a sudden we can be more efficient. We can be faster We can invent new things we can predict But when you look at this it would it could be potentially scary saying well in that case the it's just a giant machine But it's not like this Because machines can only measure what machines understand Which I'll tell you about shortly, but the human role is still very very important here The other one. That's what I call trans act anything the blockchain. That's a big topic from From Rick right Rick Richie Richie. Yeah, sorry Richie will talk about that tomorrow and of course make anything 3d printing I Mean in your business, you know, we talked about this. I know what 20 years Didn't happen Well, I kind of happened but not in a big way, but you can expect that to be a huge shift right spare parts Now we can print 150 composite materials in the near future. We're going to have nanotechnology and material sciences You could print many things on demand No more shipping expenses just anything on demand. It's it's already happening with GE and airplane engines So those are the same major shifts you want to print that out and put on your desk and so we understand this Blockchain I will talk about that tomorrow, but this is one of the things where I would say okay Blockchain to me is completely logical for smart contracts and anything that does not involve government regulation Like money and blockchain and money. I don't believe in Really, but contracts here logistics shipping information. Look at the stats here Again, you're going to go into detail tomorrow But you know people like the product the blockchain idea because of traceability records management auto supply chain automation It's a totally obvious target And in a way you could say blockchain is really just the next generation of software and it's not like we're going to think about Bitcoin as as the as a new mantra. So we'll talk about that a bit tomorrow 3d printing I was in China a couple of months ago And I went to a place where they're printing 3d houses Chinese company called way soon It's huge company. They built this house inside and outside So they'd print the furniture Maybe they'll print the people one of these days, but but they print everything in four days The whole thing and it's a giant printing machine that prints the components of the house and then they just stack it together And you would argue it's probably pretty ugly, you know But hey, you know this house I mean four days When I think about what that would do for office building That's already happening with solar energy and so on and so on and so Wild magazine just ran the story this machine will change the world. That was I think 2002 But it's finally happening So don't miss that trend I think it's very important and we have all these things coming together like what I call them So data automation Smart machines, of course, you guys know exactly what I'm talking about here, but the bottom line is this we're gonna go into this world trend Everything connected at all times That is just not because of efficiency, but also we can create new models. We can collaborate We can use API's we can figure out new business ideas, but here's the big challenge there security safety and ethics Who's allowed to see the data what exactly do they do with it? I Mean the more connected we get the more challenges will have and if we can learn one thing from the Facebook story As we're all very connected through Facebook or maybe linked in But when somebody wants to abuse it, it's actually not so hard So that's something we have to keep a good eye on as to what happens here in which way we're going with this Factory of the future This is from CB insights I'm sure you're experts on this but it seems like every process in the factory There'll be some technology that will change it. How long will that take while you can say in some industries it will take much longer But mining for example minerals oil. It's already happening What's gonna happen to people I Mean in this factory There are some people, you know, there's a lonely person here But by and large no But you know the master of automation Amazon They hired 175,000 people last year. So what are they doing with all the people if they automate? Well, they're doing things that become possible cause of automation And yes, you know, they're probably more highly skilled people. So there's a huge challenge for a social structure of employment But it's not utterly hopeless. I'll talk about it in the last chapter of my talk But in the US, you know, of course, we have huge issues with automation like truck drivers 16 million people are professional drivers and will all of them lose their job because of this now It's not that simple But a significant number and Can we then use those people to deal with automation? Well, probably not because they wouldn't know how to do it So it's a big challenge of how we move up the value chain and so point number five is this We have to start thinking not just exponential And that's very difficult for us because we're not, you know, I mean, we're not gonna live faster because the Internet is faster You know, we have to sleep. We have to eat. We have downtime. We just can't I mean if you ever tried to multitask as a human You know a 15 year old kid doing gaming and doing homework, maybe But by and large multitasking means your performance goes like this It's not gonna happen. So we have to think about this as a mental set, you know, we have to think about okay, not just Exponential but also what I call combinatorial We have to look at all those data points of technology and combine them into new ideas That's what all successful companies do Me and Mercedes-Benz as an example again 10 years ago 55 year old German engineers will sit around the table talk about how to make a better car that uses less gas and Just improve the process here today. They're sitting around the room. They're talking about the Internet of Things intelligent machines cognitive computing quantum computing the cloud and you know, it's like How they're supposed to know all these things but This is what we have to do exponential and combinatorial So that means your your mindset in this business in particular is going from the narrow focus on execution infrastructure Technology to a broader focus. It's very important because only with a broad focus will you have a future? so Give us an example from the car industry how many people are saying that we're going to switch to essentially driverless vehicles Of course, you realize this is primarily a cultural question. I'm not a technical question In Norway, we already have 36% of all cars are electric And they have lots of oil So that they're not doing it for environmental reasons and doing it for you know for other reasons of well That's probably part of the story. But so that's kind of a story here. I mean if you look at this basically autonomous cars will search It's quite clear. I think you know if you replace autonomous with assisted. It's probably more logical Electric vehicle sales and here is an interesting one at the end of the combustion engine I think we see this coming Toyota announced it I think and Volvo announced it. I think 10 years or 12 years Respectively no more combustion engines. I mean if you live in southern Germany for example around Stuttgart or so We're all the big car companies are you make clutch parts transmission parts engine parts and A regular car is about 2,000 moving parts in a transmission in a clutch Electric car is 24 You're in deep trouble If you don't see that coming because the electric car does not have a clutch it has software It has a few other moving pieces I saw a demo in Japan the other day where a bunch of cars were driving to the repair station It was fully automated as one person Operating the repair station you drive in the bots come out the massive on the underneath the car the software gets hooked up Software update a couple things boom down out Let me talk about supply chain. This is all you're gonna supply the robots not the car. I Mean mind-boggling the change that we see here and also of course the maintenance I Mean is anybody in their right mind going to buy a regular gas engine car in 10 years when I mean look at the numbers The car will go 2,000 kilometers or miles even and the maintenance will be a fraction But of course, it's not the same fun driving. It's all that stuff right, but you're not going to get an electric Hummer Or maybe there will be one. I don't know but Cheap about the mile. That's quite clear Mercedes-Benz again. They're rethinking what a van looks like It's very clever. You know, they're thinking of the van. There's still a driver But otherwise it's a giant machine. It has it has a automatic feeder robot. It has drones It has of course electric drive battery system. It's completely like a like a space station And the business model of Mercedes-Benz is not to sell the van But to get a piece of each transaction that the company with a van undertakes and we're talking about Serious thinking here, right? So that's basically that some examples of what happens in the same in a medical business You may have seen two weeks ago the presentation of the Apple watch With one big stroke Apple is entering the medical industry So it's quite clear where this is going. This is no longer a watch Which by the way out sells all of the Swiss watches easily all of them combined Now it's a medical device And you know what the next step is we're going to have something like the iPhone for remote diagnostics So you'll buy a box for a hundred dollars. You can prick your finger. You can cough into it. You wear the watch 80% of doctors visits are needed and we will trust Apple with our data Well, maybe I will you know, but I mean Apple is the only company that does not mess with our data really I mean compared to the other online companies At least that's what they're saying Let's see how it shakes out for but This is what's happening in the medical field We're going to read our data And we're going to put that data on the cloud And then we're going to be able to make health care much more affordable and we don't need as many doctors to do expensive things You know 88% of all doctor visits are essentially unneeded They could be done in other ways So mind-boggling shift again new power new responsibility because whoever has that data is in deep trouble if it goes out I talked about supply chain if you translate this to supply chain you get the similar results because the next thing We're going to do is going to speak to machines We already are speaking to machines Amazon Echo people have echo Alexa here. Yeah, some of you Yeah, Google Home Siri So today when you speak to Amazon Echo or Alexa, you have to speak a little bit like you know like speaking You know very slowly to a child or you know, and it will get it There's lots of funny videos on YouTube about how it's not getting it right, but it's quite clear in two years We're going to be at 99.98% or so of language recognition natural language processing So as a supply chain manager, you're going to speak to the machine and you're going to give the machine complex demands Because the machine will be so intelligent. It could actually understand what you're trying to say UBS UPS already using this right UPS is using AI to figure out how they can drop off the next parcel While people are still on the road to their house and they're speaking with machines So here's an example Google has a new technology called complex and what they have done is essentially said, okay, if machines can understand languages Then they can also speak right listening speaking hearing so the same pot So now this machine makes calls on your behalf It can actually simulate your voice. That's currently not in the box But it can actually call people and sound like a human They showed us about three months ago. It's created a huge amount of discussion about being deceived or so, but take it out All right, just in case that's not available, can I try between 7 p.m. And 8 p.m. Sure All right, I'll call to book under your name and phone number and I'll update you in the next 15 minutes Is that okay? Perfect. Thanks I may help you. Hi, I'm the Google Assistant calling to make a reservation for a client This automated call will be recorded. Can I book a table for Tuesday the 12th? Okay, cool. And how big is the party? It's for two people This is a machine talking, okay Now imagine if you call your favorite restaurant with a bot, I mean In Europe where I live if we call the restaurant with a bot, you know you'd hang up about After about a half a second you would hang up Okay But if the bot doesn't say it's a bot then we would stay on but then it would be really deceiving I mean imagine the kind of abuse you can get here You want to get divorced you tell the bot to call your wife Or your husband or I mean it's can be used in many different ways, but the new interface is no interface. We just speak So I I was in Los Angeles Half a year ago on the future of television and we were all sitting on a couch Looking at this giant screen and there's like 25 of us from different places between 12 and 85 And we're testing a voice control tv system You sit in the couch and you can say whatever you want and through your languages And the machine will pull pull up the program and play it for you So you can say kojak 1984 second episode minute 24. Boom. It will play That's the future of netflix Now think about your business If you can sit down in your chair and you can say show me the route of this driver Compared with the other driver look at the average number of visits Look the amount of gas being spent and we'll show it all on the graph just like this That's a few years away That's already kind of there with abby and watson you know, it's a little bit over promised but That leads me to point number six Future principle number six Data is the new oil and ai is the new electricity That's pretty much all you need to know about the future right there I mean whoever has the most data on the biggest computer and the most intelligence wins That's the first part. The second part is on top of that. You have to have a brand and trust and relationships I'll talk about that in a little while But this is where it all starts If you don't use data, you don't have intelligence. You can't do things you lose And this is all backed by this simple change in computing Computers are no longer programmed Well, there still are but we're on the way of transitioning this right So computers are now machines that can learn things called machine learning deep learning Neural networks you heard about those words before It's a little bit hard to explain without spending the next two hours on this but but uh, basically machines as Demis says the CEO of DeepMind Computer systems that turn information and data into knowledge Now this is where we should start thinking okay If you've been in this business for 20 or 30 years you have knowledge Experience understanding Shop for our knowledge as some people say right Will the computer have that sort of knowledge? Be very difficult because that knowledge wasn't engineered, you know, it wasn't Downloaded it was learned by us I mean it's an interesting angle. We look at knowledge. You would think of ourselves as being knowledgeable What kind of knowledge does a machine have? So if you feed IBM Watson books it will read, uh, I think the latest number is 1.2 million pages per minute So if you enter philosophy you feed IBM Watson all the books about philosophy It takes them two minutes to read the whole thing Does it make the machine a philosopher? Well the answer is pretty clear It does not It makes them understand all the words in the book Cross-references and look up and all you know, it's just data and information But data information is not what we do If you're a philosopher you would understand the difference. You may not actually have read all the books But you can put stuff together you understand the context That's called understanding So I don't think we should worry too much about machines having some knowledge At least not for the next 20 years 50 years 100 years. Yeah I would be with Elon Musk, you know, but when you think about artificial intelligence, you're looking at things like, uh, x-machine We are very far away from this So we shouldn't worry about that too much except for that We should not allow companies to build this and have it ready to roll out in 30 years That's a different discussion, but this is really what is reality today And that's your reality. The future of ai is not ai. It's ia intelligent systems And look what companies are doing with artificial intelligence Image recognition trading scalable processing predictive maintenance, you know software And this is why I recommend that you invest in ia, you know intelligent assistance Not so much in the idea of replacing humans Machine learning has been used as a good example now machines are able to actually learn understand context But not learn like us I mean you can watch a hundred hours of video About India for example on youtube Many people study on youtube But then when you go to Mumbai into the bazaar in Mumbai, it takes you four seconds You've learned more than a hundred hours of information on youtube And why is that? Well, because you're in the middle you're perceiving information like this when you're in the bazaar not like this when you're on youtube That's what machines do In fact machines are looking at a hundred trillions of movies on youtube to try to figure out what to do You heard about DeepMind three years ago the most complicated game the world the chinese game called go And it was said that the computer would take 15 years to figure out how to win in in the game 3.5 trillion possible moves It's not mathematical it's strategic And google's machine deep mind won the game after 14 months of practice Not by being programmed by observing games and finding its own way by learning Imagine what this machine could do for supply chain Right now that's not possible because we don't have the data to give to the machine You know it's not all connected, but I mean this is coming, right? Let's call this machine deep supply Well, we could use that to really You know turbo start and catalyze what we're doing This charts from pwc shows what's happening the potential impact of ai quite clearly you can see here on the on the right transportation logistics All of this is basically in the top row of change But think about this especially when they mean ai they really mean ia you know intelligent assistance rather than thinking machines And here you can see on these charts and we'll distribute them again later You know, this is basically what's happening. I'm sure you're aware of there's lots of discussions at this event but basically looking at You know supply chain is on top of the range there in terms of innovation with the ai Up sorry And here you can see that Also on the top of the range It's basically quite clear that you know the benefit of that is tangible and It's certainly an action item for you So basically what's happening is that machines are going to go inside of our heads Our operations they're going to figure out what we're doing. They're going to draw conclusions They're going to find patterns Will they ever find what we have in ourselves? You know consciousness That's doubtful They can only find the obvious things Most of what we do isn't obvious, you know a marvin minzky the creator of artificial intelligence of the word He said there's there's many things that we do that we don't know that we do and we do them the best In other words if we have shop floor knowledge most of it you can't talk about because you don't know that you have it Be very hard for machine to understand this But nevertheless, you know we're the At the cusp of what's people now call the fifth industrial evolution I mean we've barely learned to understood the fourth industrial evolution But now the fifth one is cyber physical systems and then artificial intelligence on top And this is something you have to understand because uterve is the primary turf You know for that innovation also manufacturing logistics shipping Let us reach who said roughly we could save about 56 percent of all expenses of logistics If everything was connected And ai would run the logic So very important to understand but this is going point number seven humanity on top of technology not underneath technology There's many things that make a company valuable and it definitely isn't just the tech You think about this for a second an inefficient company Is a nuisance You'd probably get rid of the services of that company But do you love a company because they're efficient? Yeah, that's just one data point. It's kind of like asking do you love your husband or your wife because they're efficient I mean if your husband or your wife is inefficient, that is that is a problem, right? But the reverse isn't true Efficiency doesn't figure a very high there It's just one of the things that you like So having a brand figuring out what to do as a human what you do what you don't do And those are very important things, you know if you look at me like this And you say our gird is a great source of data Then I have become a bot I mean you can go to google trends and get data, right? And in the near future you can ask IBM Watson and and we'll just give you a speech In fact, I think there will be a TED talk Is scheduled next year where all the speakers will be robots They're already very robotic, you know, I'm just kidding I don't do that many TED talks anymore, but but now you gotta think about this, right? So here's Jeff Bezos, right? Jeff says On one hand when it comes to really important decisions data trumps intuition They keep saying this we've heard this many times now last week he said this His best decisions were based on intuition not analysis Now which one of the two is true Well, the bottom line is this, you know for us Commerce is driven by data Meaning is driven by humans Don't confuse the two This is exactly what Jeff is doing if he decides to do the kindle that is not going to be driven by data because the data doesn't exist You know, how can you go to a customer and say Uh, I'm going to have a thing called the kindle. Would you tell me if you would buy it? Yeah, good luck with that You know, Steve Jobs didn't think about that when he made the ipad And Elon Musk, no matter what you think of him You know, he didn't think about that. He didn't ask his people People in the audience and say hey, would you like a cool car that does the xyz, right? I mean, it's basically just intuition So very important. We use data, but really we decide because we're human We decide based on relationships Experiences, trust, brand And in 10 years when the whole world is completely automated and connected That will be the most important factor The CEO of Walmart said the other day that in the future that's ultimately connected is the humanness that will set us apart This is the CEO of Walmart. Okay the tall order Let's see what he will do. I think Doug That's his name So in this world, we have binary information And you're dealing with that every single day But binary means yes. No. Yes. No zero one zero one Are you binary? I mean, are you going to the back of your head retrieving a jpeg and saying yes, it's good, right? That's not what we do In fact humans are what's called Multinary We have 0.15 2.87 and you know two seconds later is completely different We're actually not a machine It's hard to believe But even though of course in silicon valley, they would argue this and say that we are machines, right? But what we do as humans Purpose relationships passion imagination It's impossible for a machine Well, maybe not impossible. Maybe 50 years. Maybe a hundred years. I hope not Well, it's important that we set those two things apart. We still need to actually keep the humans in the loop No matter how much we automate the human should be in the loop and should also be in charge in my view Will that be possible in 20 years when the machines are smart? Yeah, that's a good question You know clearly this is our challenge, right? technologies exponential humans are not Now don't cry when you see this, okay, because it will not help you to become exponential You know if you want to become exponential you become a machine and that would not be a good idea Because when you become a machine you also become a commodity Everything that is a machine and technology when it's really ingrained and really there it's cheap and it's easily substituted So very important that we think of what we can now imagination observation four sides intuition ethics meaning That's why people work with you So I think it would be impossible to say that the future without technology will even exist. It does not And we're not going to go back on technology and and say we won't have AI or you know, that's not going to happen But at the same time, this is what we have Don't try to be exponential except for your thinking thinking. Yes, but living Machines don't do relationships. Remember, this is the only thing that counts in business Trust relationships experiences understanding The rest is just all extra stuff However, I would say that if you have relationships with people, but then your business is really performing very badly That's gonna because of tech that's gonna end the relationship as well So there is a a good sort of interface between those two things So a final challenge and then we'll take some questions and we can have a bit of discussion This is really what's happening in technology technology has no ethics And it shouldn't I mean, would you expect the machine to worry about the quality of life? Or values or love or whatever you I mean machine doesn't care It's a zero-in-one machine and it's gigantic I mean even a supercomputer would not have the understanding of all the components of life that we have And it's very important to understand we are inventing machines that can fundamentally change who we are Thinking machines, genetic engineering, geoengineering So for that to end well, you know, we're gonna have to We're gonna have to inject some Interesting ethics, you know from thinking about what we actually want from this I mean the internet companies are the best example Google amazon facebook they have become so good That we think of them as a threat It's it's a total paradox, right? They're in fact so powerful and so fast moving and they invent everything I mean google has 160 products now. We're looking at google and saying oh this guy's, you know, I love what you guys are doing but God, you know, you're like, you know running the world So google is now Going to be a leader in digital ethics And making sure that we get the right thing that our rights are being respected Because this is also what's happening. Our co-workers are going to be machines Because of technology Probably not actual machines even though some of those also but you know in the cloud I mean intelligent digital assistants IDAs They're going to be everywhere So you can you can speak to a wristwatch and say hey, I have to go to Pittsburgh figure it out Or you can already do that. It's just cumbersome, you know But this is what's happening in the cloud. It's extremely powerful. Look at this number of robots You know, this is a chart showing the the skews of robots and basically robots are becoming completely normal now I mean Baxter the most popular robot It costs now what 14 500 dollars the kind of Baxter 10 years ago was about 2 million And so these robots will be absolutely changing your lives, which leads me to the point number eight useless humans I hear this everywhere. I speak people are saying oh, yeah Robots AI thinking machines We become useless Now do you believe that Why do we become useless if we have a better machine? I don't understand That's like saying the carpenter is useless because now he has an electric hammer Rather than a regular hammer. I don't think we're going to be useless I think what's happening is this that the machines will do all the routines It's the end of routine The machines will figure out how to do the bookkeeping how to do the financial advice How to run the truck how to fly an airplane, you know, how to make a burger Yeah But what happens when the routine is taken care of by machines then we can do other things right We can do things on top of the routine if you are a lawyer and the machine does the non disclosure agreement And checks on the facts of the contract What can you do with the rest of your time? Well, you can do some creative work with that contract and you can figure out how to offer better solutions If you're a doctor that has rbm watson rbm watson can tell you about 500 000 other cases of cancer as you're going down the hall Makes you a super doctor Yeah, you can be lazy maybe because you're giving up your own thinking So the end of routine is not the end of work It's just the end of routine If your job is a hundred percent routine You're in deep trouble because that will end But think about this for a second. Which job is a hundred percent routine? A pilot Yeah, you could argue. Yeah, okay The plane can fly itself it can But there's many other reasons why we have a pilot Last not least because you wouldn't go on a plane there was a machine, right? So a pilot is going to stay Even if the plane can fly If you're cashier at the supermarket for checkout that job is toast End of end of discussion. That's 30 million jobs It's huge call center I mean if it's trivial transactions like changing your flight Call center will be fully automated I mean I've seen demos that you would not believe That's 20 million people right there I mean if if the New York City airport closes because of snow Then today you spend all day on the phone trying to get somebody to pay attention Especially if it's united And then you know in the future you can just speak to a wristwatch and we'll say, you know I'm ready to rebook boom you're done I mean do you need compassion for that? Probably not So those jobs will be gone and we have to figure out what to do with those people that is a social challenge A political challenge what we do with those We shouldn't minimize that at all But the potential of new work Research shows that 70 percent of all new jobs in 2030 have not even been invented yet That's our kids They're going to invent their own jobs Do you know how many social media managers exist in the world? 32 million People who deal with social media and social content that job didn't exist 10 years ago now we have 32 million And many kids are doing that job from some island in Thailand That's the other thing 50 percent of all new jobs will not be jobs. There'll be occupations On-demand work The gig economy So that is a huge shift in our future where we're going with this because one thing that's very important I think for us to realize especially if you have kids Anything that the machine can't do Explodes in value You could argue a machine can have imagination or be creative Yeah, but you know it is still the machine I mean it has its limits there the machine can fake empathy or simulate mystery Yeah, I can do that, but that's as we know not the same thing. So this is really what our kids have to learn So when we talk about the future of what we do we have to say well Understanding tech and stuff. That's good. But really this is what we are That's going to be our future in terms of work I mean you can see here on the list what people are looking to do with artificial intelligence, right This is the question from the world economic forum say what do you intend to do When you use artificial intelligence And the first one is that companies that's not exactly the right zoom here, but Companies want to modify the value chain They don't we'll just want to fire people that is the second right reduced workforce due to automation And this is a very bad idea Every company wants to reduce the workforce because it's expensive, you know humans are expensive machines are cheap But humans can do things that machines will never do which is to increase the value of what we're doing By creating things. I mean look at the list here So that is going to be a bit of a challenge there. So this is the question we have to ask What should or should not be automated? That is going to be a key question in the future You have to automate because The pressure is there to be more efficient to be faster Clearly that's a major driver and then we have to say okay, what should we not automate relationships trust engagement Negotiation emotional intelligence So in switzerland, I work with a big chain of grocery stores and they have decided To remove all the shares and have people do the self checkout, you know with their mobile But they're going to take those people and they're going to start a new department in the store That's about giving culinary advice and health advice On food and they're going to retrain all the cashiers to go back there and tell people about what to cook and how to cook And they're going to fire maybe five percent of the others And will that be successful? Absolutely. It's already working People come to the store because it's efficient and fast and if they want to tip on cooking, they just go back there So that is a huge shift. We should think about what should you not automate? I mean Don't think too much about this automation craziness. You know not everything is about efficiency Efficiency is for the cfo And I sometimes I say efficiency is for robots Because it's you know the mechanical process, you know, but we have to think a little bit further So let me wrap up and then we take some questions. How to do the future first This is the principle of the future that goes, you know, uncounted because I only had eight. I could only use eight The future is not an extension of the present You know technology is changing our world at a mind-boggling pace if you think that your business in five years will be just like today just faster You're seriously wrong I mean, there isn't a single business that has stayed the same because of technology Look at media publishing music cars transportation cloud computing medical I mean 10 years. We're not going to take pills To fix our cholesterol. We have technology for that So, I mean, it's basically the future is not like the present So here's what you have to do if you want to be in the future You have to continue operating in the present Because that's where everything is happening and then you have to think about the second version of the present Which is the future at the same time. It's called hybrid thinking So the key question you have to answer what will my company do in five to seven years And what skills do we need and what do we have to cultivate for this? Because you know innovation is not the same as transformation Innovation we do every day and things get better and run better, but we have to transform The second thing is the future in terms of the action items We should reduce the fear of tech But we should not be stupid Reducing the fear means don't pay too much attention about black to black mirror and x machine and transcendence Because you know, that's hollywood and their primary goal is entertainment and based on fear We cannot go into the future based on fear I mean if you have kids you have to teach them that We're creating the future There's some things that we have to do like we have to probably ban artificial general intelligence as a weapon But otherwise, you know, we have to embrace this and figure out what the next steps are So in the nutshell, this is the formula for the future. We're going to see all this technology I mentioned earlier the internet of things the cloud quantum computing And on top of that we have this We have the things that only we can do And if you want to make money in the future, that's your position, right? You cannot be without technology because you will become uncompetitive But if you own a technology, you become AT&T You become a mobile company A basically commodity So it's very important. I think business is always about relationships has always been and will also be in the future But we have to get smarter. I'm doing this What I call the and rhythms in the book So the future is awesome humans On top of amazing technology Again, if you have kids think about this The primary thing you want your kids to be is to be an awesome human Technology they can always buy and they can always learn technology But to be an awesome human requires a little bit more than just throwing a switch As I sometimes say happy, happiness is not a download. It's not something we can just install So this is very important when we think about the future as to our position here So I want to thank you very much for your time. You have received the book already Good luck reading it. It's a good airplane read, you know three hours in the future We're going to distribute the slides. I know there were quite a few I have a pretty active youtube channel