17/02/2016 by Thomas Murr
Technological change is a constant, the others, life, death and taxes are not really so pleasant or as interesting. There has of course been hiccups in our technological advancement; the fact that the great castles of England are made not of concrete but hewn stone is perhaps one of the most poignant examples of technology moving in the wrong direction. Even with these types of rare setbacks I think we can safely assume that our children will live in a far different future to that which we imagine today, it will be a radically different world, probably more different than that between your parents and yourself.
Technology is advancing at an increasing rate; while it took thousands of years to progress from horse to combustion engine we are now in an era where your engine will soon be more intelligent than your horse and a car will be able to take you where you want to go autonomously. Each generation has had to overcome technological change, it is inevitable, jobs will become irrelevant and industries will die but they will be replaced by more efficient technologies and new jobs.
Even though history has constantly proved to the contrary I still read articles proclaiming the death of jobs, these writers assume that once many of the jobs we take for granted today are mostly automated we will have either a huge amount of unemployed people or a situation where we can lie back and relax, letting the robots take the strain. This has been said many times before. I’m sure with the invention of mechanised harvesting the landowners wondered what on earth the majority of the world’s population were going to do! Technology creates many more economic opportunities than it destroys, let’s look at some industries and professions and explore what they could look like in future.
Anyone who has ever used a regular stockbroker should understand that the majority of them will dramatically under-perform the market over time. Like most people they buy what is going up and sell things that have become cheap. With their high fees and high turnover of assets many people are choosing to invest their hard earned savings passively with etfs or robot managers. Investment strategies that have proven to work over time can now be automated and packaged into an etf. In the future we will probably see an extension of this trend. With the rise of AI and thinking machines your money could be being used globally where it is best served. Huge computing power will be directed to analysing the text and figures within company reports to predict future cash flows and growth rates and so try and estimate future investment return. Using learning capabilities computers will constantly be updating their algorithms in response to their own observations and rebalancing your portfolios in an attempt to have the best risk adjusted return.
Highly skilled humans will likely attempt to look for faults in the system and try to profit from them while humans working alongside the computers will look for frailties before they are found and exploited by others.
Financial advisers may depend heavily on AI to project future returns. When the market goes down your pension fund may message you explaining, with empirical data, how you could take advantage of the weak market and invest more now to bring your retirement forward.
The whole financial system is also more likely to become more resilient by becoming less centralised, custody may be decentralised on open ledgers while assets could be traded in varying types of private and state currencies. I can also see the possibility of assets being held by custodians that do not have a national base, perhaps in international waters.
There should be massive opportunities for people to involve themselves in financial technology, human creativity and common sense will always be needed to complement computing power and to work on building real relationships with customers.
The manufacturing industry will most likely continue in the trend of becoming more automated, humans will still make the luxury goods, to own products “made by people” will probably become a status symbol! With automated manufacturing there should be an unprecedented ability to customise, detail will not adversely affect cost as labour is automated. Everybody will have the opportunity to own a micro-manufacturing businesses. Most manufacturing will likely be cheaply outsourced to automated facilities which may produce many different items for thousands of businesses as and when required by customers. Design and branding should be key to profitability as manufacturing and commodity costs will likely become more globally standardised. As manufacturing costs decrease, and commodity extraction costs are slashed, huge ambitious construction projects should become viable. I can see the ability of people to design and manufacture their own clothes, furniture or toys through simple computer interfaces, if you were to like something that you saw , I can imagine that through a click on your phone you could have one produced and delivered to your home. Perhaps when you go to a store it will not be to buy but to test products, you can then instruct your preferred manufacturer to produce the object for the best cost. The store owner may accept a royalty on your purchase. If you want to learn more about future manufacturing possibilities I can recommend peter Marsh’s excellent book “The New Industrial Revolution”
As manufacturing costs come down new huge scale machinery will likely become available to miners, drillers and other players in the industry. New technology will become available that accurately maps and plans extraction of deposits in the most economically manner possible. With the depletion of the best deposits on land automated mining on the sea floor will become cost efficient and large discoveries are likely to be made. Metals and minerals are also extracted directly from seawater.
With huge commodity extraction to keep up with a demand for raw materials from the development of automated construction new job titles are likely to be numerous but will require highly skilled people.
We have all heard about self driving cars but I don’t think we completely comprehend the true scale of the changes this revolution in transport will bring about. As well as freeing up time for us to work and perhaps sleep, distance may not become so much of an issue. If you can sleep while being driven, reliance on trains and aeroplanes may not become so necessary for certain journeys. Without human mistakes and with automated traffic, vehicles should be able to travel much faster and stop less, cutting journey times considerably. It may become impractical or a luxury to own a car, as being autonomous, the vehicle like a taxi, will be able to simply move to the next customer after dropping you off. Much parking will not be required as cars will be able to be in constant use day and night. Living outside of the city will become more of a pleasure as the commute will be more comfortable and take a much shorter amount of time..
A fleet of autonomous cars would be an excellent place for a marketer to make a connection with a future customer. With the possibility of low cost future travel and depending on your spending habits you may be offered free travel in return for watching some personalised advertising.
Advertising and Marketing
Marketing and media will likely become a lot more focused on targeting individual customers. marketing budgets will continue to be used much more efficiently. With knowledge and data sharing, specific companies will be able to target specific individuals, families or businesses. Using AI, computers will be able to work out the probability of specific customer conversions and even apply person specific discounts or rewards to influence the success rate. Advertising media will be able to change depending on who is watching, aspects of customers lives will be able to be incorporated into advertising media. Imagine watching a computer generated film of your children benefiting from a new educational toy, would you want to buy it? Perhaps an insurance company could use specific knowledge of your health, finances and of your family to explain the benefits of life insurance in more personal language. Food retailers may be able to see your purchasing data and explain to you how they could save you money perhaps, offering to deliver your daily purchases today free of charge. Wealthy people with high spending will likely be able to be paid to watch specific targeted advertising. Companies always need to pay a lot to get in front of these customers anyway so it makes sense to use that budget to directly create an impression with a customer. Imagine booking a meal at a restaurant and being offered a bottle of your favourite champagne if you watch a 5 minute personalised video from an investment firm before you arrive. With the rise of automated marketing and media a real human element will become even more important, perhaps attached to that bottle of champagne would be a handwritten note from a salesperson offering to give you call the next day.
We look forward to continuing the exploration in the soon to be released (part 2)