 So good morning. What a great building apart from the elevator, right? That's quite scary. Okay, so here's the future Good morning. It's really a great pleasure to be with you today. The view is rather limited, but otherwise. It's nice That's not bad. Huh? That's Italian. So Interesting the other day was in I was in Tokyo and I had a half hour conversation with the sushi chef I spoke German and And he spoke Japanese to this device as long as you can keep it basic it works So now there's a new device coming up where you you wear an earpiece and the other person also wears an earpiece And you don't actually have to have the mobile and you can speak to each other at a different language at the same time Like Star Trek, right? So two years for this technology to be a hundred percent So as long as you speak a mainstream language, you know, I'm not Swiss German or Finnish, you know You can actually have a relationship with anybody through this device So science fiction is becoming science fact we have a situation where things that used to be theory are now actually working Serve driving cars language translation Intelligent machines, maybe not quite yet, right? But language translation I mean this means basically in three or four years, maybe five. We're just going to talk to computers No more typing And this is I like like talking to a friend, you know black mirror, right? So you can sit on your couch and you can say I want to see Kojak, you know 1984 You know that kind of dates me but episode number four, you know And we've already where he sucks on the on the lollipop, right and boom. It will just play And in a couple years, we just sit down the computer and we say give me the projection prediction of sales For the following country under the following parameters and we'll just spit it out This is all kind of you know pie in the sky type of stuff But I have seven principles I want to share with you today first I want to show you what my job is and my job is not to predict But it's to listen Most of my job is to observe and pretty much observe the obvious I would say But 95% of my job is to observe and to think about what happens in the next five to seven years So I do the opposite of my clients which don't usually observe very well They're very good at executing, but I also do this I take complex scenarios and I help clients understand the way forward So I work with 47 people around the world in different industries We have to realize and I'm sorry for the in the screen cuts off a little bit here So but I'm sure you can imagine the rest the future is no longer an extension of the present That is because the things that we have seen as a limit, you know technology social things globalization Technology in general spread of the internet and so on they're finally here So basically what's happening is that you know, we always think of the future as being an extension of today But it's no longer true This is very hard to understand for us because for example, if you're in the car industry You used to sell cars and what's the future of the car industry? Mobility Not to own a car. I Mean if you're in the real estate market the future is probably that people would share of the office 50% of people are going to be in the gig economy in 15 years So that changes everything politics society culture social contracts pensions Also longevity, you know where we're rapidly getting a older all of us that so every year We're gaining one-third of the year in longevity The kids of my kids will be a hundred years old and average There's a mind-boggling idea so you can retire with 63 and then you know, we have 37 years on the cruise ship, you know Should be great for the cruise ship industry, but you know, I used to be in the music business and You know, when I was in music business, we actually sold music a little round things that remember those called CDs I mean today if you buy a CD and you give it to your kids for Christmas. They're called a therapist I think you have some sort of mental problem But I used to sell CDs in the future of the music business is not to sell music Spotify doesn't sell music. I Mean 10 was it 21 million songs Our Spotify are available for 10 quid. I Mean we used to spend 20 quid on one record, right? So Spotify doesn't sell music is free What a Spotify sell? convenience piece of mind interface design features Like Netflix same thing, right? We don't we don't subscribe to Netflix because it's cheap movies You know, just it works, right? So that's really hard to understand and really what that means, you know It's what I call the end of good enough So this is very common of course in in banking and insurance and other Companies like this, you know to where you said well what we offered was good enough and there wasn't much of an alternative So you couldn't leave and now it turns out in banking for example 74% of kids are ready to skip the bank and go to an internet company for banking. I Mean here in this country Lloyd's Bank, right to make this huge shift towards the I think 2.5 billion pounds into innovation, right? This is n26 German Bank a German kid leaving home right now is certain to sign up with this bank. It's a virtual bank I think they have several hundred thousand per week signing up It's completely digitized and there's there's no physical building and of course, you know the fees are essentially zero compared to the other banks That's a mind-boggling innovation here you have a chart of Accenture showing basically the gaffer, you know, Google Apple Facebook Their increase in banking it looks like this and then the fintech companies the digital leaders like Lloyd's and others Right and then you have the language It's pretty clear language here. What is happening with good enough Netflix surpasses cable TV Cable TV isn't good enough anymore. I Mean today if I have a 25 year old kid that moves out. They just want high-speed internet. That's it Everything else is somewhat in there somewhere, right? Spotify is a great example people don't buy records anymore and Amazon is the purveyor of good enough Amazon is the new good enough It's mind-boggling. Oh, if you look at their progress, you know every time Amazon sees some weakness in the market They move into an offering So Amazon is now getting into checking right Amazon is becoming a bank. I Don't know if you heard this news, but just a couple weeks ago in the US So 340 million prime customers of Amazon will get free online banking in the next couple years No fees no transaction free credit card International money transfers peer-to-peer loans all part of Amazon Prime. I Mean if you're a bank to put the fear of God into you I suppose right but it's the end of good enough We're going to have to change things a little just a tiny bit right jumped out of that old fishing boat into the new one and That is true transformation transformation is not to stay in the bowl and say I'm going to grow it a bit bigger All of us do that every day, but we're going to actually have to transform become somebody else And don't be mistaken you know you may think but it's not going to happen to us because you know We're in the oil industry or mining or you know tourism or In my own business we used to write research reports and we were in this fishbowl Writing lots of reports selling them for 10,000 euros each and then came along Google Trends You want research you just go to Google Trends and now we speak to IBM Watson you get a research report I mean in a couple years that's completely automated Intelligence knowledge What can not be automated? understanding Because it requires human perception as Einstein already said Imagination is more important than knowledge In five to seven years. We will have a computer that will have the capacity of a human brain in 2050 one computer will have the capacity of all human brains The calculating capacity Of course, it will not be emotional or social. I at least I hope not But you know that's going to really change our life and then we're going to be in a world there If we want to be successful in this place, we have to make a leap and we may have to pivot It's my favorite American word, you know turn around while you're in the middle of the airplane like Walmart Right Walmart is pivoting trying to You know rather than hiring another another one million people for some new retail places. They're going online They're completely pivoting and Most industries will be reset and rebuilt from the ground up This is very important to realize you know the car industry wasn't rebuilt by VW or by Audi Here came Tesla and Google and very general motors and Toyota built the car from the ground up The Tesla is from the ground up a Software package with a large battery. I mean it's important to understand this You know we think about marketing or advertising you know, we're going to completely reinvent advertising As I'm sure you're aware of if you're into advertising Advertising is primarily based on surveillance and tracking and noise-making And it worked But now we have better ways So rebuilding all that stuff will be crucial future point number two is that we're living in this world but technology is becoming infinitely powerful and Humanity which is Sort of ephemeral things, you know feelings understanding emotions, you know, that's sort of converging It's really hard to understand how that actually will play out in the future because technology is becoming so powerful But what I call ethics in technology digital ethics is a key differentiator How how safe is my data? How much do you use tech to replace people? Do you still have a soul? Yeah, does your company have a soul? This is the key question actually You wouldn't believe how many companies say well, we're gonna innovate and we're going to transform We're gonna fire as many people as possible and use tech to increase the margin and Double revenues in five years. Okay, that's a nice idea. But you know, what do you actually stand for? Do you actually mean something and then when I ask the question I get the answer. Well, we're gonna double revenues That's not a meaning just so we don't get confused. You know doubling revenues is not the meaning of a company So in this future, we're looking at the fact that technology is essentially both of these things It doesn't have ethics I Mean technology can be used for good or for bad. That's just the nature of technology Nuclear energy the telephone television, I Mean you can be addicted to television. You don't have to go to Facebook for that So he's a key question, right we have to actually use technology like genome editing or Virtuality we have to use it in such a way where it's mostly like this. Oh like this I was thinking of Facebook and I'm pointing over that We have to use it in a good way. It's not that we don't use the technology, but when we use it too much It becomes evil, you know, it becomes toxic So when you go to some restaurants in Southeast Asia, you're sitting around having dinner And all there's every single family with kids. Everybody has two devices to That they're dealing with at the same time while they're trying to eat, right? I will call that toxic, right? It's it's kind of hard to imagine this happens everywhere now And the other day I was in Greece and the on Santorini and the restaurant owner kicked out a Bunch of people that were working on the devices the whole time making calls and Not actually enjoying the view which was like 200 miles out into the ocean I mean, so that's that's the challenge of technology and When you talk about ethics, it's not anything really fancy It's really the idea of saying we may have the power to do this or the right even But we choose not to do it And this is what went wrong with Facebook It wasn't a crime. It wasn't a hack So it's hard to say what exactly happened, right, but it's ethically Irresponsible and ethically speaking Facebook is responsible. So three weeks ago I left Facebook as a result after 10 years, you know, and my traffic went down about 70% of my website I'm sure you know how that feels But that's gonna happen every day now We're gonna have to think about how ethics will influence this this Barbie doll for example that Barbie launched two two years ago This is a toy for kids That connects to the cloud So a four-year-old can speak to this toy and the toy will learn who the kid is and Make smart responses So the benefit being is that the kid can learn that most people are machines, right? That's That's a good side effect You know, so there was a lot of pushback against this and they took it off the market I think but this is the kind of you know, it's interesting, but is it a good idea? This app called replica replicates you You give it all the data that it wants and then it can act like you and the prime purpose is To act like you when you're dead That's the that's the purpose of this app And it technically speaking it works So you give it all the video and audio, you know black mirror, right? It's here don't try it No comment on that but You know the best the pathetic thing about Facebook was Not actually what Mark said in Congress, which was actually not bad is the pathetic questions of the politicians I mean all of us could have asked better questions. Come on, you know Do you understand what Facebook actually does? But anyway, so I think for our businesses. It's important that we maintain the license to operate the permission to operate Whether you're an advertising or marketing or public transport or whatever that what you do is responsible in a larger sense I mean you know, you don't leave our folks up is one of those companies that's trying to do this It's very hard because it's it's cost money But on my you know, I I junked Facebook as a I removed the license to operate in my life But I think we'll have more of a story there in the long run. So here's the thing, you know, because we're connecting everything now We're connecting our driving our food our digital money our health care records. I Mean in five to seventy years. We're going to be so connected that the benefits will be I mean imagine all of our health care records and DNA in the cloud We can solve huge medical problems just by having the intelligence But when we do that Who's gonna safeguard what we are? I mean the day will come that we're going to have a hundred thousand clones of people that have the DNA in the cloud Right literal clones. This is not science fiction That's certainly not something you would want for your life. I don't think I Mean there's people already cloning that dog, which is a different story, but So the more connected we become the more we have to think about this, you know How do we actually make sure the human is still inside and I guarantee you if you just connect people and you make that work That's great. But if you don't do this, you will not be successful. That's what people want They want to connect to other, you know, the most important thing for humans is not technology Maybe hard to understand today, especially when you're talking to 20 year old kids or so, right? But it's to connect to other humans I mean human happiness is defined by relationships primarily and I don't mean relationships with the screen You know actual relationships Point number three Exponential technologies exponential change Brings heaven or hell right it can be fantastic and be terrible. I think it's 90% heaven I'm an optimist there, but you know, it could turn out bad if we had a surveillance state, you know See what happened in Turkey, you know how social media is being used in Turkey to put people to jail, right? And who is in charge of that would it be us? companies Well, to some degree, I mean you can say you're gonna opt out of Facebook at heart Yeah, you can do that, but it's really the government that needs to do it And this is of course a challenge because most governments don't really understand these issues very well You know, that's that's gonna be the future But you know, we're looking at this, you know, we always have the same cards We had for thousands of years, you know, these kind of morals values and then technology gets a new card every day and So it's the state the government that needs to think about how this all comes together This is why we had the GDPR GDPR Whatever something like that. This is why we have regulation and this is very hard to think about because you know We are basically the bottom line is we are in an exponential state of change And when you think back 20 years, we're talking about the paperless office, you know Memo Napster and the music music in the cloud and all that kind of didn't work. I Mean I started the company like Spotify in 2001 and we fried several million dollars because it was too early We were here But now we're at the pivot point of exponential change with the takeoff point And lots of people I talked to they're saying well, you know, we tried this like solar energy or whatever, you know, 10 years ago But it didn't work and we lost all our money But now it's different Now we're at the takeoff point. We have all these things the Internet of Things Intelligent assistance quantum computing and you know the sky is the limit when you go up 30 times on the exponential scale from 4 It's 1 billion That's 40 years Maybe 50 So our world in 50 years will be 1 billion times as far as long in terms of technology not in all technology So even hard to imagine what that means, right? But you know, we're looking at changes that you know Basically this wave of change is now rolling over all industries first music and media telecom communications and so on and So I talk about future readiness a lot and future readiness is really three pieces Okay, because the future is no longer about the time. It's about your mind. It's a it's a mindset The number one defining factor for the future of your business is whether you have a future ready mindset And that includes, you know thinking understanding exponential combinatorial how things are coming together Interdependent and holistic business models And this is what all the successful companies on the on the list prior, right? This is what they do They think like this they think like this and They reinvent and they do other things the future is no longer time frame. It's a mindset So here you can clearly see, you know in this mindset, you know connected mindset all these things that are Influencing each other are creating a new opportunity And it's kind of hard sometimes to understand all these things because you know new ecosystems are coming Quantum computing is here roughly seven years will have machines that are a million times as powerful as today So any job you want to give them, you know running a hundred trillion data feeds no problem You can 3d print things We've talked about 3d printing for 20 years never did anything But in the very near future, we're going to print all of the older parts we need on demand UPS truck will be a printer Will not actually bring the pieces And we have this possibilities of you know getting all the data from people Google home, right? Anybody here using Google home or Amazon Echo Alexa? That's essentially what it does, right? Jumps inside of your head fishing for information Listen to what you say The mega shifts I don't have time to go into great detail here But in my book is chapter three and basically it's not just digitization that's changing our world Is all the other stuff that that? Vapors around it like augmentation Datification automation give us some examples So here for example if you take the car and you can see how these mega shifts have changed the car And how we're essentially facing the the end of the car as I like to call it I mean being from Germany. This is a pale painful subject, right? But you know what we see here clearly Autonomous cars will search even though I don't think they'll be truly autonomous in the sense of like what we do with them But level three or four would be plenty to change the entire city of London And do away with parking right electric cars of the future every car company has said they're gonna stop making cars with gas engines Every company and they talk about 15 years, but they really mean five, right? So I mean look at this, you know transportation as a service rather than owning a car It's a huge business opportunity, but is it going to work for BMW? They're used to much higher margin. I mean the cost of per mile is declining for the user Because of this kind of services and this is the Tesla right? Starting from scratch So what's happening here is that this whole idea of you know how the car is defined is Impacted by the mega shift and changing it So very important for us is to take a wider view and I see again and again the most successful companies. This is what they do sales revenues projections planning execution efficiency Well, I'm telling you efficiency is for robots, right? Efficiency is for machines. That's what machines do and What we need to do is to go take it further low can say well, you know, we're not talking about cities We're talking about music in the cloud. We're not talking about physical cars. We're talking about connected cars mobility We're talking about not the banks building, but the bank digital So take an a wider view The other thing is that you know now we have this saying and it's been said many times data is the new oil That's a very old thing, right? That's finally true Artificial intelligence is the new electricity Which means that you have the data and then you have a machine that understands how to read the data Because humans can't read a trillion data feeds You need the machine in marketing. This is crucial like marketing automation And then the Internet of Things connecting traffic devices everything As I said earlier, this could be a nightmare It could be fantastic. I Think it's gonna be great, but we're gonna have to agree on what we want. We don't want these guys to make social decisions What you'd be surprised, you know, there's a first company is proposing we should replace the judge by an AI My hunch is that Trump is already an AI. We just haven't found out, you know That's why he likes to treat sort of automatically, right? As Kevin Kelly says, you know a movement to a future where first we digitized and now we cognify up and make make things smart and We jokingly call this a smart converter This is McKinsey says roughly 62 trillion dollar business taking the old stuff putting in the converter Outcome smart smart city smart farming smart health Maybe even smart government possibly even smart banking So this is a future that we're facing. You know, there's a AI everywhere a Spotify has AI Airbnb has AI These guys have AI and this is what the list is of AI You you can download the slide later to take a better look because I have to wrap up very soon as you can hear But many people have said intelligence is the new UI AI is the new UI other user interface And that's gonna be very true in just a couple years, you know Advertising us we know it and search is gonna be gone in five years I mean who would go to a machine and type in best sushi in London when the machine is essentially in your head Or you can just speak to it I mean when you speak to a machine you say I'm looking for a sushi place It's not too expensive that has the following where my friends have gone That's close by and the machine says boom here you are and I have a coupon Try to do that on a search engine So getting into those machines if you're selling stuff that is the ultimate because if you're not in there You won't even exist So I'll wrap up by saying that intelligent machines will change our world more than any other invention And again, I think that it's mostly positive But we have to get used to the idea that machines can actually do things, you know that they're not no longer stupid I mean looking at this what IBM calls cognitive computing, you know, we're now going to a world where Essentially the computer systems can think not like we do but they can analyze things They can make their own decisions And we should not overdo this. I don't think you know, we need to be very careful because this is human intelligence It is actually totally unclear how we do all of those things and That's why we haven't succeeded in building this Because machines don't have emotions social Kinesis tactic in our body emotional intelligence. That's the stuff that we have built in Things that humans decide in 0.4 seconds Like, you know, if you're a threat or if you're interesting or that takes 0.4 seconds when we meet The machine needs years for this To analyze So let's not get carried away. I think there's a there's a chance that these guys will get too smart in 50 years But for the time being these are as dumb as a toaster compared to humans That doesn't mean we can't use them. We can use them But we shouldn't trust them in the sense of a black box, you know Just saying well the machine has said, you know, and so that's it It's like trip advisor and who would trust trip advisor, right? I mean, it's interesting, but is it real? It can be I mean, I'm sure you know what I'm talking about, you know, when you use trip advisor, it can be quite good and real but like a person Machines don't think like humans do So that's also why I think we should not give machines too much power. We shouldn't give them the power to upgrade themselves And this is where it gets dangerous around you know Elon Musk and Stephen Hawking where we allow the machines to connect That's kind of like asking for trouble, right? So I always say that intelligent assistance is fine But AI to me is a rather scary topic Yeah, so I wrap up saying but basically that we're looking at the end of routines for jobs Any job that's routine machines will learn Any that includes a scientist anyone. We'll just take a little bit longer a Speaker and now you have the first Ted conference where it's only robots that will do the talking I Like to say jokingly that's kind of like what we have today. I'm just kidding. Yeah, cuz they all say the same thing No, I do love Ted, but anyway, I don't think that means the end of human work. I Think that's what we have to give ourselves a bit more credit than that Because if we let go of the routines fine, you know, can we you know, are we gonna become useless because we don't put in data anymore or drive a car? Yeah, if that's all you do then you're you're gonna be useless, right? But can you rise above that? Can the government help by figuring out how to create new jobs and train our kids differently? Because this Can not be replaced by machines That's 95% of what we do Understanding negotiations storytelling invention creation thinking Maybe machines will learn that in 50 years. You know, I think for the time being we're quite safe there So very important. You know the percentage of human only work will increase Increase dramatically if you have kids you gotta think about that their jobs won't be here You know doing things that machines can do there'll be a hundred percent human only Jobs that only humans can do So I think that's good news. It will take quite a bit of of understanding But you know to summarize basically we should not concern ourselves too much with efficiency You know the CFO loves efficiency Everybody loves efficiency because it makes money, right? But efficiency isn't human if it came down to efficiency. We wouldn't exist. We wouldn't be allowed to exist No, because we're not efficient We waste so much time we make up things we have feelings, you know all that stuff we don't need So we have to use technology not just to be efficient, but to create new things That is the holy grail. That's what's really transformation. Everything else is innovation Which we need But it's really about creating new things using technology like Airbnb and others have shown The other thing is that you know, we need we need motivation to change How do companies change? I've been doing this now 15 years. There's only two ways that will change as People and as companies pain and love So if you're in a company, it doesn't have enough pain, that won't be changed If there's no love of new ideas, there won't be change So your job to drive your company forward is to inject some pain if needed You know to say what if and to bring up some new ideas You know humans are not actually driven by this realization on the spreadsheet Saying that we can double revenues if we do XYZ That's kind of interesting if you want to you know buy a new Tesla or something, but it doesn't drive people You keep that in mind when you think about this finally, let's keep in mind that we are driven by technology All these changes come from technology, but we're actually defined by humanity Companies are defined by what they stand for what they say what story they tell What purpose they have and whether you can trust them as Peter Drucker used to say variation of Peter Drucker Culture eats technology for breakfast. So thanks very much for listening and hope to see you later