The digital economy, combined with advances in technology, has already changed the way we conduct business online. But bigger changes are coming.
In this second installment of my three-part “Digital Disruption” series, we’ll look at the technologies behind the rapid change, and learn why we are only at the beginning of the era of disruption. (Click here to read Part 1, which highlights five trends influencing executives’ strategies.)
1. Artificial intelligence and quantum computing: Dubbed as the biggest risks facing humanity by Elon Musk and Stephen Hawking, artificial intelligence and quantum computing are already leaving specialists flabbergasted. Google’s AlphaGo AI computer was put to the test against a grandmaster of Go, the most complex computer board game in the world, and beat him in five rounds–a feat no one thought possible for another five to 10 years.
Meantime, a quantum computer in China recently shattered the record for the most transactions in a second. Unlike in traditional computers, where a silicon chip’s transistors are either turned on or off, a “qubit” can be both simultaneously. Google and NASA tested their own version recently, which they said is 100 million times faster than a traditional computer. This begs the question: Which industries won’t be affected by this increase in speed and potential for productivity?
2. Blockchain: If you’re one of many who have yet to wrap your head around what could be the new digital currency, Blockchain is the bitcoin-distribution channel that uses computer code to secure and engender trust in digital transactions.
Goldman Sachs, for one, is taking it seriously. In just the past few weeks, the firm has invested in a digital-lending platform, co-led a $50 million investment in a bitcoin startup, and launched a podcast called “Exchanges at Goldman,” where senior executives discuss technology on Wall Street.
The opportunity for Blockchain is that it can be extended using APIs to transfer any type of value between people or institutions. That includes stocks, property, reward points, car ownership, and, of course, currency.
Blockchain has the potential to become the single source of monetary value and bargaining truth online. This could have a huge impact on the financial services industry and its current protocols.
3. Autonomous vehicles: Airbnb and Uber have risen out of the sharing economy, but it may also be the reason none of us will need to own a car. In the same way that software and online services have gone from perpetual purchase to subscription, users will “subscribe” to a certain class of car and simply order their pickups and dropoffs.
This phenomenon must be promising: U.S. President Barack Obama announced a US$4 billion investment in autonomous cars, while three of the top car manufacturers around the world are expected to offer automation as a standard feature by 2020. If you can’t wait, a kit that can make your car autonomous can be purchased for US$1,800, while a truck kit costs US$35,000. Along with phasing out petroleum fuel, industries based around the automobile industry will face severe disruption in the near future.
4. Robotics and drones: Last year, a Chinese company showed off a single-person drone craft for transportation–with no flight controls. Drones already have many uses and will have a big effect on postal deliveries, aerial photography, and even life-saving procedures, as shown by Brazilian lifeguards who use drones to deploy life jackets. Drones and robotics will affect how FMCG goods are packaged and transported, with companies such as Amazon investing heavily in robotics for their delivery centres. Robotics have been discussed as the solution to health care for the aging Baby Boomers population.
5. Virtual/augmented reality: For those not in the know, VR is the full 360-degree immersion in a digital world, while AR is typically a digital overlay on a pair of glasses. Both can be used to showcase everything from travel experiences and exercise to gaming and real estate. NASA has started training programs for astronauts to practice spacewalk repairs and test runs using VR.
We are in for a wild ride over the next decade if, as expected, these technologies come into full commercial use. How will leaders handle these coming disruptions? Come back next week for the answers in my final post.