The group was the first to get a run-through of my new concept framework Vectors of Disruption, shown below, which I used to introduce and frame the rest of my presentation.

Click on the image for the full-size pdf

Some brief thoughts on the framework:

The first comment is that I – as many others – am not a fan of the word ‘disruption’, which has lost much of its meaning through misuse and overuse in recent years. However I cannot find a better word for what is meant here. I’m very open to other suggestions!

Overall the intent of the framework is to distinguish between the different layers that are driving disruption, from the underlying forces, through the high-impact developments and finally key structural shifts. These are often confused, making the mechanisms – or vectors – of disruption far harder to understand.

The framework is of course immensely simplified. There are many other elements that could have been included, such as demographics, however many of these will play out over a longer period.

Underlying Forces

The most common focus is on Information technologies, with past future exponential growth in Data, Processing, and Connectivity, which a long runway yet for these trends. Advancing Interface technologies are also critical in giving people far deeper engagement to information.

Technologies in other domains, including Materials, Health and Energy are also impacting not just these industries, but many others, including construction, infrastructure, manufacturing and transport.

Expectations are continuing to rise on every front. Societal expectations, notably of sustainability and accountability, seem to be shifting into higher gears. Customers are demanding powerful experiences and customization. Another important force is that of shifting Investor expectations, who not only expect consistent growth, but also scalability and constant renewal.

High-impact developments

Here we can catalog the array of technology buzzwords that soak through almost every business presentation you are likely to see this year, such as AI, Robotics, Big Data and VR. While these developments are hyped, they individually are likely to have a massive impact on business and society, and even more when they are combined. However there are also important non-technological developments, including Power to the individual and active Capital reallocation by investors.

Structural shifts

While it is bold to point to only two fundamental structural shifts in the economy, I believe they will be responsible for the majority of structural change in coming years.
Automation in manufacturing has already significantly played out, however we are really just at the beginning of the impact of automation – as the application of AI and robotics in a work context – on not just almost all job roles, but how organizations function.
Platforms are the fundamental mechanism underlying the network economy. Beyond the evident rise of marketplaces in transport, accommodation, work, and many other domains, platforms also encompass blockchain and crypto-currencies, open innovation structures, and new models of reintermediation.

Disruption

It is clear that these forces, developments and shifts mean that existing Business models are unlikely to be sustainable without changes, sometimes evolutionary, sometimes revolutionary. However we also need to focus on other domains of disruption, including Organizational structures, Urban structure, Education and the Role of Government. Perhaps most importantly there is potentially massive disruption to existing Social structures. Understanding and shaping this in positive directions – to the degree possible – is everyone’s responsibility.

Of course this framework only looks at the vectors and structure of disruption, not the responses or solutions. I will be creating other frameworks soon that focus on what we need to do to create successful outcomes in a disrupted world.

As always this framework is released as a Beta v1, not intended to be final, but a first attempt that will be refined over time if useful. So please let me know your comments, ideas, and constructive criticism so that can be incorporate into subsequent versions.

Source: Commonwealth Bank

A few years ago I wrote The new layer of the economy enabled by M2M payments in the Internet of Things, envisaging the potential of machine-to-machine payments.

I described how micro-payments between machines could lead to far greater efficiencies as for example cars, drones, or farms negotiated directly with each other to achieve their objectives without the necessity for human involvement. I noted that the cost efficiency of crypto-currency payments made them a strong contender for a platform for the M2M economy.

Commonwealth Bank is one of the banks globally pushing forward in the space as these ideas move from the future into the present. The report notes:

Our research has confirmed that many high value physical assets in business are significantly under-utilised. A key observation is that the different and complementary capabilities of various machines will inevitably lead to a market for machines to share services with one another.

To date, our research has identified over 20 potential use cases for machine-to-machine economy experimentation. The implications could be especially significant for sectors including manufacturing, logistics, resources, agriculture, energy and infrastructure.

We are currently working with our partners and customers to understand how banks can provide value added services to smart machines by leveraging Internet of Things data and automating processes and marketplaces using blockchain-enabled smart contracts.

There are many implications to be explored before this goes mainstream. This includes governance and ethical considerations:

In the short term, it’s easy to envisage smart contracts with built-in guardrails embodying essential regulatory and business rules – from reporting requirements to transaction value limits. But as artificial intelligence (AI) begins to arrive at scale, the question is whether these mechanisms will be enough. That’s why it’s important for intelligent machines to learn about regulation and socially responsible behaviour, as well as about business. In the same way as we educate our children to follow social norms, we need to ensure our machines are not only smart, but ethical.

Another key issue is that as independent systems negotiate with each other there can be highly undesirable unintended consequences.

In the 1990s I closely followed the work of Pattie Maes and her MIT Software Agents group, which researched the possibilities and implications of an agent-based economy. Much of the research of the MIT team and their peers is only now becoming relevant as independent, relatively intelligent software agents are on the threshold of building a substantial non-human economy.

We now need to investigate and understand how that autonomous economy may actually work. The potential for economic and resource efficiency is enormous, but we need to be aware that autonomous multi-agent systems just might run amok.

Image: Ricardo Rels

I told the journalist in our interview that while I know a number of Australians who have deleted Uber, most Australians focus on the utility of the service. I was quoted:

Futurist Ross Dawson said Australians had embraced Uber with a willingness to overlook some transgressions.

“The reality is that Uber would not be the company that it is today, with the scope and potential that it has, without having actively flouted some rules and regulations and pushed the boundaries,” Mr Dawson said.

“At the time when Australian states were pushing back against Uber’s aggression, the vast majority of people were saying `I like you, it’s better than taxis’.”

Mr Dawson said the test of Australia’s loyalty to the Uber app could come in the future with Uber’s long-term vision replacing its fleet of drivers with self-driving cars.

Until recently activism has primarily impacted establishment companies in sectors such as banking, oil & gas, or retail. Technology companies have been seen by many as welcome disruptors of the status quo.

Now the power of the new vanguard – and often their business models – are exposing them to censure and even boycotts, with the Uber backlash epitomizing this social shift.

I wrote earlier about the potential for boycotts for companies that use automation in preference to human employees. This is a real possibility.

Before that point, the usefulness of on-demand services – with value concentrated on the leaders in winner-take-most markets – means that many will overlook any qualms they may have. However platform markets can tip away from incumbents – and being deeply disliked can prove a tipping point in enabling market shifts.

Consumer attitudes and activism will absolutely shape on-demand markets as they evolve, and may at times even help drive winners and losers – both individual and corporate.

Image: Aaron Parecki