In my recent post on the Future Business Landscape, I shared predictions pulled together by SAP. The sources for this type of information are multiplying, which for me signals the start of a growing focus on the future of business. With this post, I am launching a series that delves into what that future might look like, starting in a logical place with future scenarios. This visual representing a series of paradigm shifts has anchored my thinking for some time, and sits at the heart of this future.
Enabled by the technology curve, the future scenario curve is the most impactful. So we will begin our journey by focusing on a number of these scenarios:
Radical life extension – Our kids will live to 90 or 100 as the default. We are gaining 8 hours of longevity per day – one third of a year per year. Genetic engineering is likely to eradicate disease, impacting longevity and global population. DNA editing is becoming a real possibility in the next 10 years, and at least 50 Silicon Valley companies are focused on ending aging and eliminating death. One such company is Human Longevity Inc., which was co-founded by Peter Diamandis of Singularity University. Peter says:
“Today there are six to seven trillion dollars a year spent on healthcare, half of which goes to people over the age of 65. In addition, people over the age of 65 hold something on the order of $60 trillion in wealth. And the question is what would people pay for an extra 10, 20, 30, 40 years of healthy life. It’s a huge opportunity”
Sharing economy – this phenomenon is projected to grow 3,000% between 2015 and 2030. It is about owning the interface, not assets: Uber owns no vehicles, Facebook no content and AirBnB no real estate. But to underscore how difficult it is to predict how these scenarios play out, not everyone agrees on its path. Is it a real paradigm shift in access versus ownership, or is it a short term phenomenon driven by a bad economy?
Money 2.0 – the SAP predictions have crowd funding growing 200,000 percent between 2015 and 2030, and the unbundling of financial products and services continues at an accelerating pace. By 2025, there could be 10 global virtual currencies that will be considered mainstream, with a combined market value exceeding $5 Trillion. Bitcoin will still be the largest. Some economists and futurists are even starting to wonder about the future role of money
Automation of Everything: Are we on a path towards autonomous decentralized organizations? Many followers of Blockchain are convinced. What are the implications on jobs, the need to work, and the role of money? Here is a possible leading indicator from the Economist: 50% of U.S. Jobs lost in the 2008 recession were middle-skilled jobs, but only 2% of the jobs gained since then have been middle-skilled. Here is another projection: by 2030, 2 billion jobs will disappear – roughly 50% of all the jobs on the planet – as a result of technology advances. What is work in the future?
Healthy Life Extension: as with radical life extension, there is a growing believe that average life expectancy will increase dramatically over the coming years. What will that mean to a global population that is expected to grow through 2050, when it is expected to reach 9.3 billion? Sequencing genomes could cost less than 10 cents by 2020 and analyzing streaming patient data has been found to drive a 20% decrease in patient mortality. What pressure does this place on caring for the elderly? Over the period from 2010 to 2050, the proportion of over-60’s in the developed economies is projected to rise from 22% to 33%, with a more dramatic rise In developing world from 9% to 20%. Does this place more pressure on realizing the connected healthcare future scenario?
Connected Healthcare – by connecting the dots, we see that elderly care may be a main driver for this future scenario, as it is projected to be a $319 billion market in the US by 2016. Today the average annual cost of a nursing home is more than $75,000, and elderly care can be degrading and inefficient. Telepresence robots will allow families and doctors to periodically check in and visit with the elderly, and wearable health sensors will monitor heart rate, blood glucose, fall-detection, and blood chemistries. Doctors will remotely monitor a patient’s health and medication compliance. A recent report from Deloitte sees fragmentation in health care happening on the edges where regulation is not a factor, in the markets for wellness providers and quantified-self devices. They see this as the beginning of fragmentation in core health care services.
Smart Home – here is another dot to connect. Taking care of our elderly at home – enabled by connected healthcare, and components of the technology curve (mobility, IoT and Robotics) – will replace traditional methods
Energy Internet – the International Energy Agency predicts that energy demand could rise 40% by 2035. Efforts around innovation accelerators like renewable energy on the technology curve will need to accelerate
Autonomous vehicles – this future scenario continues to be the most effective in driving an understanding of the breadth and depth of future scenario impact. Let’s start with some U.S. annual numbers:
- 33,000 lives are lostand a million injuries. (Over 1.2 million lives per year lost around the world.)
- $230 billionof accident cost in the U.S. (NTSB). About 2-3% of GDP
- 50 billion hours(or $1 trillion) of people’s time. Around 8% of GDP
- 50 billion gallons of imported gasoline(12-15% of the USA’s CO2 emissions)
Some additional thoughts and facts:
- According to this Article, the 1.2 billion cars on roads sit idle on average 96% of the time. That is 8.2 trillion hours of nonuse per year
- In attempting to Change Everything, Google’s goal is to increase car utilization to 75% or more by facilitating sharing
- An OECD study modelling the use of self-driving cars in Lisbon found that shared taxis could reduce the number of cars needed by 80-90%
- Research at the University of Utah found that an autonomous taxi with dynamic ride-sharing could replace ten private vehicles, reducing urban vehicle numbers by as much as 90%
- A study by the University of Texas estimates that 90% penetration of self-driving cars in America would be equivalent to a doubling of road capacity and would cut delays by 60% on motorways and 15% on suburban roads
- The first self-driving truck (built by Daimler) licensed for testing on public highways hit the road in May. Truck drivers are not the only ones disrupted, as America’s 3.5 million truck drivers sustain workers in other businesses such as motels and restaurants
- Today 94% of car accidents are due to human error, according to NHTSA, and the three leading causes are alcohol, speeding, or distraction
- Accidents kill around 1.2m people a year. A study by the Eno Centre for Transportation, a non-profit group, estimates that if 90% of cars on American roads were autonomous, the number of accidents would fall from 5.5 million a year to 1.3 million, and road deaths from 32,400 to 11,300
- Vehicle owners will no longer need accident insurance as the potential for driver error has been eliminated. Any crashes that do occur are the result of product failure – transferring the risk from individual owners to a product liability insurance requirement for vehicle manufacturers. Car insurance is worth $198 billion a year in America alone
- In February three big American insurers, Cincinnati Financial, Mercury General, and Travelers, noted in their SEC filings that driverless cars threaten to disrupt their business. Similarly, LKQ, a car-parts firm, pointed out in its filing that fewer cars on the road, and fewer accidents, could reduce its sales
- The value in car making will shift from hardware to software and from products to services
It is hard to argue the benefits that accrue to society if the driverless car becomes ubiquitous. Some estimates have more than 54 million autonomous cars on the road by 2035. Some of the benefits include (from recent posts by Peter Diamandis, Singularity University, and The World IF):
- Saved Lives – Google famously said that they would reduce traffic accidents by 90% via their driverless cars – after all, they obey traffic laws, they don’t drive drunk, they won’t be texting, and they don’t fall asleep at the wheel
- Reclaiming Land – if driverless cars have little need to park, this land can be re-purposed. Some estimates have parking accounting for as much as 24% of the area of American cities, and some urban areas have as many as 3.5 parking spaces per car; even so, people looking for parking account for 30% of miles driven in urban business districts. By liberating space wasted on parking, autonomous vehicles could allow more people to live in city centers; but they would also make it easier for workers to live farther out
- Saved Energy – today, close to 25 percent of all our energy goes to personal transportation and 25 percent of our greenhouse gases attributed to cars. If cars don’t crash, they will be designed for the experience, not to withstand an accident. You don’t need a 5,000 pound SUV driving around a 100-lb passenger (where 2% of the energy is moving the person, and 98% is to move the metal womb wrapped around them)
- Saved Money/Higher Productivity – lighter electric cars that don’t crash, a shift from ownership to access, and disappearing insurance and parking payments add up to an expected 90% savings on local automotive transportation bills. Regaining 1 to 2 hours of productivity in your life (work as you are driven around), reclaims hundreds of billions of dollars in the U.S. economy
These scenarios underscore the importance of Future Thinking, and provide a window into the drivers of business in the future. In the next post, we will explore the dynamics that drive future change, and the potential paths that business may take.