Every industry will be transformed by new technologies, a new workforce, new business models, and new buyer expectations. All businesses will become software and analytics companies (Uber, after all, is just software; they do not own any cars or have many employees, yet they are becoming the world’s largest logistics company).
Bitcoin is just software called cryptocurrency. Money will soon be software too—in fact, most of it already is.
In 2001, in my book eBusiness or Out of Business, I wrote “you banish software, you banish the world.” Let us consider how software will transform various industries over the next 10 to 20 years:
Financial Services and Banking: Smartphones will replace wallets and physical cash. Processing will be instant for account creation, credit, and money transfer. In 1990, 90% of all NASDAQ volume was driven by humans. By 2025, 95% of all NASDAQ volume will be driven by machines. A handful of algorithmic trading firms will capture the vast majority of equity value creation— after all, it will be a zero-sum game and the person with the largest computer will win.
Automotive: Self-driving cars will become the norm. You will summon them using your phone and they will drive you to your desired destination. You will pay only for the distance traveled and be productive in the process. With autonomous cars, will our children even need a driver’s license? Cities will be transformed and become safer as the number of cars on the road (and accidents) are significantly reduced, saving millions of lives each year. The competition is already reeling at the advances that Tesla, Google, and Apple have made with driverless and electric cars. Traditional car companies as we know them today will disappear. Each car will be powered by over 150 million lines of software code, more than is currently required by Google Chrome or the Mars Curiosity Rover or an F-22 Raptor. Did I mention cars will be electric?
Insurance: Aging insurance agents will be replaced with direct relationships between customers and insurance companies as they fortify their franchises. Data companies with a digital sequence of the person or a property will eliminate the need for applications or consumer-supplied information. Algorithms in massive computer farms will be applied to instantly measure risk profiles, underwriting needs, and the required premium for each specific policy. As cars become autonomous, accident rates will plummet and the car insurance market will disappear. The day of digital reckoning is quickly approaching for the unprepared insurer as extreme computing, online data, and mobility reach critical mass. Know the person or the property (or its digital sequence), and you know the risk.
Agriculture: Enter the agricultural robot, or agbot. Agbots will bring efficiencies and benefits to agriculture, eliminating physical, back-breaking tasks. As the price of agbots falls, farmers will transition from working in their fields to working as managers of their fields. In many ways, this is still analog thinking; in the future, we may not even need livestock farms. Agbots will change the world and the future of food production by optimizing land use and eliminating a dependency on livestock. Nearly 60% of all ag-lands are used for beef production. A single cow takes up nearly two acres of land and 441 gallons of water for one pound of beef. That same cow produces the methane equivalent of four tons of carbon dioxide a year (a significant percentage of all greenhouse gases). The need for beef will be diminished by innovative approaches like substituting insect protein for meat or in-vitro (synthetic) meats designed to taste like grade-A5 Kobe beef. Are you ready for your veal created in a petri dish?
Legal: Law school graduate unemployment has hit a record high. What was once a future-proof degree will see 80% of its work eliminated by supercomputers. Within seconds, computers will be able to produce legal advice with 90% accuracy compared to 75% human accuracy. Though perhaps there will always be a need for human specialists.
Retail: I liken transformation in this industry to an iceberg, with 20% visible above the surface, and 80% hidden from view, below the surface. There are the must do’s above the surface for extreme automation of operations, customer-centricity, omni-channel experiences, two-hour delivery, and technology augmentation for every sport, for every age (from team scheduling to fantasy sports to golf-swing analysis). Three-D printing will be the transformative technology allowing retail companies to turn high-resolution scans into highly customized products. A China-based company is already selling 3-D printed homes. They can print 10 homes a day at a cost of $5,000 USD per home. When raw materials, suppliers, supply chains, distribution, and logistics are all transformed, the end result will be bespoke, high-performance product—from athletic shoes to homes—for the consumer.
Energy and Electricity: Renewables win. Electricity will become cheap and clean. We are now installing more solar energy than fossil fuel-based systems. The price of solar will drop so much that it will force coal companies out of business.
In 2014, Ontario, Canada eliminated coal production. With cheap electricity comes cheap transportation and abundant water. The average consumer could save $2,000 USD a year. Producing water from desalination will cost less than running your toaster for a year. Water is not scarce, potable water is. Imagine a world where potable water is abundant.
Healthcare: Big data will create cures for cancer, turning clinical specialization into globally available protocols. Nanotechnology will change drug delivery and targeted therapy. The cyber-knife will become widely available. Genome editing could eliminate mutations and deliver enhanced humans (H+). Three-dimensional printing will make prosthetics affordable and liberating. Life expectancy now exceeds 80 years of age. Living to be 100 years old is well within reach.
Education: As connected devices become ubiquitous, younger generations will have access to education like never before, without even having to leave their homes. Education will become democratized, despite threats from terrorist groups or governments controlling or limiting access to education—especially for young women. Gender will no longer be a roadblock for access to education and educated young women will become educated mothers, ensuring generational access to education.
As industries evolve, so too will the skills required to succeed in the 4IR. I will look at these new skills in my next blog.
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