Recently, I attended the World Economic Forum’s, Annual Meeting of the New Champions in Tianjin, China which is also known as Summer Davos. Here were four key takeaways.
1.We all want to stop the world and slow things down but underlying forces will not co-operate
At Davos the backdrop was the stock market decline in China that spread to other markets combined with a collapse in oil prices which tinged the proceedings and this time it was Brexit. Both events were unexpected and six months apart. In addition, in the US we have Trump as the nominee, a surging anti-immigration backlash around the world and the arrival of negative interest rates in Europe and Japan.
The new normal is not low growth but high uncertainty. The reality is life is uncertain but despite repeated attempts to slow or stop them we can be certain of three trends which are digitization of everything, demographic shifts including larger populations in Africa and the move to safety or opportunities with hundreds of millions of immigrants who will not be stopped and globalization which is out of the bottle and cannot be stuffed back.
Today 150 million Chinese travel widely. The second largest and in some cases the largest number of employees for all the major American tech firms are in India. More than half of all the sales of Fortune 500 companies are outside North America. Backlash there will be. Anyone trying to stop it will be whiplashed.
2.The future of Consumption is going to change dramatically impacting all Companies
Technology breakthroughs are coming fast and furious and are feeding off each other creating even more exponential change.
Eight factors that are driving change: Artificial Intelligence (Cognitive Computing), Internet of Things, Robotics, 3 D Printing, Block chain, Autonomous Vehicles, Digital Traceability, Virtual Reality
These eight factors create five systems of future consumption which are the on demand economy, the sharing economy, the circular economy, the experience economy and the platform economy.
A company like Uber displays all these five economies in that a single Uber car replaces 30 cars and could reduce the number of cars in London from 2 million to 1.6 million within a year showing how a circular economy works. It’s a platform for not just delivering a vehicle but food, it’s clearly a sharing and on demand economy but also an experience economy since more an and more people believe the experience of getting a car with a push of the button and then sitting back and looking at their mobile phones is a better experience than driving themselves. 10 percent of millennials have given up their driver’s license.
Every firm must now adapt and re-invent itself for these five economies of consumption which will impact the global 5 trillion-dollar consumption economy.
3.AI and VR and other technologies are re-inventing how we get information and will be entertained.
Today there is a breakthrough in AI like never before due to machine learning algorithms particularly a technique called deep learning. Deep learning has allowed for major leaps in natural language processing, speech recognition and image recognition. Here is a wonderful presentation on AI (the first 20 minutes are a bit boring but explain history but the last 20 minutes are wonderfully illuminating)
When Alexa speaks from Echo, when Netflix recommends a list of movies or Buzzfeed shows you the articles you want to read all of these are AI deep learning. AI in our business at one level is about hyper personalization but also will give rise to issues of privacy.
Virtual Reality is about to break through due to the fact that it can be delivered via a mobile phone and with little as a Google cardboard one can experience things. The New York Times won a Cannes Grand Prix for its work in VR for itself and Clients. See Displaced by downloading the NYT VR app on your phone. You do not even need a google cardboard.
The key with VR is that it makes you believe you are in a place and it can be addicting. Some have called it an empathy machine and it opens up completely new fields not just in story telling but in experiencing travel, getting educated and much more.
4.The Future Does not fit in the containers of the past.
Today the big challenge is whether it be government or academia or media or business organizations all of us are struggling to cope with the shifts underway with organizational structures and rules of engagement fine-tuned for an eroding age.
In a world of cross border companies like Google, Tencent, Facebook among others how can todays governments and structures manage? In a world built around ownership where access (music, experiences, transport) is growing how does one adapt. We have to disrupt ourselves.
The multi stakeholder approach at WEF and the move to systems (understanding that systems are interconnected) makes this conference key to adjusting all of us to the future.