Written by Naveen Srivatsav
We’re gearing up to start a new EmTech blog with my team, and this is my first article, hopefully one of very many. Very curious to hear your thoughts, not just on this particular topic but also what kind of topics you would like to see us writing about in future.
This particular article is about how we as EmTech researchers think about and analyse technology trends. It might be a long read, but is helpfully broken up into 5 parts, one for a different perspective. The perspectives we will touch on in this article are:
- The exponential perspective
- The philosophical perspective
- The systems perspective
- The strategic perspective, and
- The design perspective
Read on to find out how we use these perspectives (among others) to help us identify, analyse and understand technology trends.
The exponential perspective
Looking out at the world today, there is no denying the incredible pace of technology-driven change and innovation. Even 5 years ago, the example of billions of people carrying supercomputers in their pockets, each more powerful than the computer we used to land on the moon, was inspiring. Now it almost sounds like a cliché — been there, done that, what next?
That is just one example, and a highly visible one at that. We still haven’t even mentioned all the innovations that are impacting every single industry and service… nor have we touched on the invisible threads of data that whizz across the planet every second of every day… that in turn are giving rise to a new class of “silver-collar” workers (we refer here of course to the rise of autonomous robots and artificial intelligence as economic agents)…
How do we even begin to make sense of the pace of technological change? From a historical perspective, it is easy to infer that the pace is generally one of acceleration and that pace itself is accelerating. Careful with the whiplash!
One of the most common ways this accelerating acceleration is commonly expressed is with the term “exponential technologies”, and behind this theory is one of the biggest names in futurology, Ray Kurzweil. Kurzweil’s thesis is simple, humans have not evolved to intuitively understand exponential growth, and if we learn to do that, we will see the world very differently. Let me demonstrate. A colleague at the Experience Center once posed this puzzle to me.
I dig an enormous hole, it’s BIG. I start throwing stones into the hole, one day at a time, all of approximately equal size. Every day, I double the number of rocks I throw into the hole. How long does it take to fill up the hole?
A simple question, and perhaps you might argue, an incomplete one. We don’t know the dimensions of the hole or the dimensions of the rocks, and if only we knew that, we could ultimately answer this question. But what we can say about this problem is that, the day after the hole is half-full, it will be completely full. Do you see how exponentials creep up on the human brain?
Thus Kurzweil suggests that any self-respecting futurist should really train their brain to understand the power of exponential thinking — which is implicit in technological patterns like Moore’s Law. And as a demonstration of such an ability, Kurzweil unveiled a list of predictions for technology back in the early 90s, and they have so far come true with an 86% success rate. Not bad for informed guesses. Of course, some futurologists would debate the realism of technology predictions in complex conditions such as geopolitical uncertainties, resource scarcity and climate change, so perhaps we should look at the Kurzweil method as a kind of theoretical achievable maximum if everything goes right.
Practically inspired by Kurzweil and to a large extent by Elon Musk, I find myself saying this in workshops often: “Stop trying to make things 10% better than today. Ask instead what the theoretical achievable maximum could be, and then figure out what to solve to get as close to that as possible.”
The philosophical perspective
Another way to look at technology I really like is by one of my favourite philosophers of technology, Marshall McLuhan. While not many may have heard of him today, in the 60s he was as much a household name as Einstein, in vogue for his altogether poetic approach of looking at technology.
If I could summarise McLuhan’s theory in one sentence, it would be “the medium is the message”. Now what does that mean? Clearly we have to understand what he means by the word “medium” and then try to unravel what the message is.
You see, according to philosophers, technology can be defined as “mechanical/cognitive extensions of the human being and his inventory of means”. In this view, the wheel could be said to be an extension of the human foot, the book an extension of voice beyond time/place and the computer as a bicycle for the mind. Think about it…
McLuhan’s addition here is that while all technologies extend human abilities to achieve certain tasks, some technologies naturally begin to dominate our inventory of means, and in doing so, change our very worldview. For example, Google is one of many search engines, useful as an extension of the magnifying glass. But Google has also become a noun and a verb, and it is indicative of a de facto expectation that all relevant information should be available on-demand when needed. Thus technology of this kind should be called “medium”, for in a sense they become the primary means through which we experience the world.
Now that we know what “medium” means, what does “the medium is the message” mean? Take the example of electric light. If I were to ask someone what electric light has done for the world, they might say “oh now I can read my books at night”, or “I can walk safely down the dark street” or “I can watch a football game in the evening with everything so clear that it’s like broad daylight”. These answers all betray a central illusion that McLuhan saw through — books, safety, baseball matches are all content that could be experienced even without electric light. Electric light merely allows this content to be experienced in previously impossible conditions. Thus the message of electric light as a medium is not the content of the book, the perception of safety, or the result of the baseball match. No, the message of electric light is that we are no longer limited by darkness — “the city no longer sleeps”. That is what electric light uniquely provides that no other technology provides.
One can intuitively sense how McLuhan’s theory can trigger interesting viewpoints about technology, and indeed I religiously plumb the depths of this approach to find insights.
Here’s one example of how I use this. We all know the apocryphal story of Kodak, and how despite seeing an early prototype of a digital camera, the CEO was unable to see its full potential and rejected it… and well the rest is history. Well, how might we avoid making the same mistake? Perhaps the CEO should not have compared the digital camera as it was to the photographic film after decades of innovation. Instead, the CEO might have taken for granted that technology will only become cheaper better faster smarter given enough time. Thus the more interesting question to ask would have been, “what can this technology do that no other technology can do?”. The answers to that question may have changed the course of an entire industry.
Try this exercise for yourself: what can each of Essential 8 technologies that we have identified do that no other technology can do? Once you’ve worked out your answers, try discussing it with others. I guarantee interesting conversations.
The systems perspective
Having a background in both engineering and policy analysis has been particularly eye-opening for me. When it comes to emerging technology research, I try to understand how it works to a sufficient level of detail. But the policy mindset also keeps me focused on the large-scale long-term implications. So, there is this constant cycling between the big picture and the nitty-gritty details that I find extremely interesting and rewarding.
A mindset that you quickly pick up as a policy analyst is that of (complex) systems thinking, which is a way to create a big picture context for the system we’re trying to understand.
For example, instead of just asking what 3D printing can do, we can also ask why is it becoming such a buzzword now? Apparently, less than a decade ago, a few key patents on 3D printing expired, which allowed lots of startups to come in and innovate, rapidly decreasing costs while increasing the number of materials. Thus just this one question has expanded the discussion of 3D printing from just the technology to the ecosystem of innovation.
Another example, we can also ask what are the factors that determine how flexible 3D printing can be — and here we can identify that the outcome of 3D printing is determined by:
- The capabilities of the printer itself: what size of artifact can be printed, how fast can we print, what methods of printing exist etc
- The capabilities of the printed product: which material(s) can be used and what are their properties, how can products be customised, how sustainable is the entire value chain etc
- The capabilities of the software layer: how to share the shape files, how to protect IP, how to integrate across companies/ecosystem etc
So, by asking the right questions, we can map out the larger 3D printing space and analyze for example where the innovation is currently happening and why, and which areas to expect more attention in, which players to expect what moves from in which areas, and so on.
Of course there is much more to complex systems thinking, including ideas like emergent behaviour, feedback loops, leverage points etc, but for now this is a good teaser. I find it an interesting challenge to use it in the strategic-technological context to not just understand what drives a complex system, but also identify where best to intervene.
I use systems thinking whenever possible to structure my own research, most notably for our very own annual State of Tech report and presentation. Obviously, keeping track of technology trends at today’s pace is quite challenging. Where do we even start, change is happening all the time everywhere all at once! Here especially the systems thinking view helped us to identify a unique “lens and filter” metaphor inspired by how cameras work. If you think about a camera, it’s a pretty standard device. But depending on the kind of lenses and filters you attach to it, different things stand out. So similarly, we identified 4 lenses, namely:
- Telescope — to understand how technology is changing man’s footprint at the planetary scale
- Wide-angle — to understand how technology is changing the world of business and industry
- Portrait — to understand how technology is changing we interact with one another, and
- Microscope — to understand how technology is changing our understanding of what’s happening inside us
Within each of these lenses, we flexibly investigate several filters such as cybersecurity, renewable energy, future of education and so on.
What’s unique about our State of Tech presentation is that we are not so much interested in only statistics and investment numbers, but also the big picture view of why certain technology trends are happening, why now, and why that matters to whom. This is possible thanks in part to a systems thinking mindset.
The strategic perspective
In consulting, we talk often about Digital Transformation. Every company is planning its Digital Transformation and we try to help them on their journey. But not often do we ask, why do companies need to transform, and if it’s a journey, what is the destination? Do we really have a map of what exactly needs to be improved, or why? And what is the role of technology in a strategic plan anyway?
A former colleague shared a powerful framework with me, that I still use to this day, because it clearly depicts the big picture so clearly.
I present to you the Digital Triangle. Let’s start at the bottom of the pyramid.
- Any company worth its salt must establish a working effective system of people, process and technology. In consulting-speak, we might refer to this as the operating model. That is really the basis of running a firm of a decent size in a volatile, uncertain, complex and ambiguous (VUCA) world. Okay, what next?
- To innovate itself and stay relevant in the market, the company at a broad stroke can innovate either its Operations (internal oriented) or its Customer Experience (external oriented). In the Digital age, the ways in which you do these things can and must involve…
- Data. For me, going Digital is synonymous with doing interesting things with data — be it in the collecting, combining, analysing or using of data — to yield practical and desirable outcomes. Every Digital trend that you can think of is underpinned by, or improved by data. And so, as companies improve their Operations and/or Experience, all the while gathering data of their efforts, they are able to measure what works and what doesn’t. Here it becomes a learning loop. Things that work are embedded permanently into People Process Technology, and things that don’t work are discarded to try other new things.
- Now we look to the arrows on the left and right. As you improve your data game, you gain an Analytics Advantage in that you are improving your capacity to get data-driven insights, and your datastore in itself becomes valuable competitive advantage. Unfortunately, if your data is valuable to you, then it is also valuable to someone else. Hence, the more you depend on data, the more Cyber-Risk you are exposed to. The cost-benefit of these should be balanced, otherwise the data advantage is either not worth it or leaking away.
- Finally we come to the top of the pyramid, the North Star of Digital Transformation. At this stage, the company has become Digital Native. Now, this DOES NOT mean that every car company has to become Uber or every hotel has to operate like AirBnb. Rather, the Digital Native of each company can be quite unique, almost like a fingerprint. But there are nevertheless some common properties. Digital Native companies tend to have a) high agility, b) high product-market fit and c) high synergy with the wider digital ecosystem.
If you notice, at no point in this map do we talk about any specific technology or method, and that is by design. At the Experience Center, we repeat often that technology is merely an enabler, but you have to first figure out what you want to enable and why that matters. This is in my view where technology and strategy converge.
The design perspective
Finally we come to the design perspective. At the Experience Center, our designers are focused on bringing out the best customer experiences, enabled by technology where needed. Perhaps you have heard the term Design Thinking — have you ever wondered why it matters so much?
The most important thing to remember that no one’s identity is “customer” 24/7/365. They are all people with their own complicated lives, family matters and priorities. They are fathers, daughters, chefs, doctors, bosses, suppliers— anything but just a customer. In fact, they might only think about a certain company or product for 5 minutes in a given week. And that’s okay!
To the extent that they are thinking about a certain company or product at all, it is usually in the full context of their personal/professional lives and it is usually to solve a particular need that they have. Digital here only provides them certain conveniences in searching for, comparing and finding the right offers that suit their needs. As far as they are concerned, once they have selected a certain product/service, they don’t care how it is delivered. Press this button, and it gets delivered 2 days later; everything just works. No brownie points for complexity or effort — even if there is no doubt a lot of complexity and effort that goes into delivering that product/service.
Putting this perspective into a single image, it might look something like this:
Thus it is only by accepting that so many parts of a modern company — branding, marketing, supply chain, human resource, seamless delivery — is only briefly considered by the customer who has other, more important things to worry about anyway, can companies understand how important it is to make the customer journey their priority. Because the company that gives the customer the least to worry (or think) about is ultimately the company that will win their loyalty. It’s a bit counter-intuitive because we put so much effort into boosting the brand recognition of companies, but the Design Thinking approach is trying to make the company as invisible as possible.
I think Jeff Bezos, CEO of Amazon, put it best in this quote:
“Our customers are loyal to us right up until the second somebody offers them a better service. And I love that. It’s super-motivating for us.”
So again, we come to an understanding of the role of technology in the customer experience: that it is not about wowing the customer with the latest bells and whistles, but really solving a need as quickly, as flexibly and as seamlessly as possible.
Of course I realise that each of these topics deserves its own full chapter because there are so many nuances to cover, but I still hope that this overview provides a primer on the many ways with which we creatively deconstruct technology at the Emerging Technologies group at the PwC Experience Center, all in order to understand the real value that technology brings to businesses and their customers.
Hope you liked reading it. Please reach out, we’re always eager to hear feedback and learn from mutual discussion.