One of the things I would love to see is a shift in discussions from technology for the sake of technology, to frustrations that we are surrounded by so much wonderful technology but it introduces more friction, when – in reality – it should be taking it away.
That will be the highlight of the next era of understanding digital. I still see companies talking about digital transformation and I think it is the wrong way of looking at it because almost everything carries codes today. So everything is digital, the discussion needs to be about the transformation – a shift from a product-based brand to an experience-based brand. In the next five years, changes will start to come from ‘Generation Z’, who are slowly waking up to the fact that they don’t want to own things, they want access to experiences.
Big changes in automotive will come when OEMs realise people prefer an access model, rather than ownership. This shift in mindset will fundamentally change the way they run their business.
The biggest change will come when companies change their business model from producing products – hardware and pieces of software – to producing frictionless experiences. The unit will become a by-product of the experience – that will be the biggest change. New mobile releases are big news and journalists write great things about the Google Pixel and the iPhone 8. But there’s no real change in hardware – it’s effectively just an upgrade. The questions need to be more about the value these items offer.
The impact of digital
Big changes in automotive will come when OEMs realise people prefer an access model, rather than ownership. This shift in mindset will fundamentally change the way they run their business. Today, in any OEM – with the exception of Tesla – 90% of the management power is placed up to the point of sale. The biggest change is that we need to shift that to have more power after the point of sale.
Manufacturers need to start understanding the network where each unit on the road will benefit the next unit and the unit after that. They will start adopting the fax theory, where the first fax machine cost $1,000 but it didn’t have any value because you couldn’t do anything with one fax machine.
Manufacturers need to start understanding the network where each unit on the road will benefit the next unit and the unit after that. They will start adopting the fax theory, where the first fax machine cost $1,000 but it didn’t have any value because you couldn’t do anything with one fax machine. If you have one vehicle that offers full connectivity and the most advanced operating system, it will only recognise its true value if other vehicles on the road also have the same software and back-end functionality. The future business model of any successful automotive manufacturer won’t be driven by horsepower, it will be driven by gigabytes.
If you look at the business models of Apple and Google, Apple makes money out of products and then by introducing a set of experiences around the product such as iTunes. Google, on the other hand, is placing all of its intelligence in the cloud and the products are designed to drive engagement with their services. The two approaches are both right, but could be perceived as ‘wrong’ at the same time because neither considers the other approach. When you are moving forward it needs to be a hybrid solution of the two, especially when it comes to the automotive industry. You need a set of intelligent products, but they must drive engagement with a set of services that goes way beyond what an OEM can offer today.
The pace is only going to speed up
The future is only exciting if we make the smart moves. We, more than other creatures, created a dependency on technology that we developed ourselves, so we’ve built our own technological jail and it is a place we need to break from. The question is not about developing another intelligence that is external to us – that doesn’t make sense. Nor is the question about putting robots in a factory to replace workers, or using them to replace truck drivers, doctors or lawyers. We need to realise that we’ve peaked our evolutionary potential – we are still reading two pages a minute – that hasn’t changed – so where do we go next?
The metaphor I will use is of crossing the Rubicon. We are standing on the banks of the Rubicon and next to us are a set of technological advances. We have to decide if we let them cross the Rubicon alone, or if we work to nd a way to create a new understanding of humanity moving forward.
We need to re-think what is human and that is what makes me excited. But if we are not going to stop and think about that, then we can forget it. We are very fast in developing new solutions, but no-one is pointing out the impact on morality, trust or ethics. When a significant can’t number of autonomous cars are in production and on the road, will some decisions still be made in a subjective manner? In an extreme example, if an autonomous car is driving and there is a meteor shower that hits a pedestrian right next to the vehicle, what is the car going to do? Continue on its journey or stop and help?
With the emergence of AI, if we are going to have interactions based on code, rather than between humans, we need to establish how decisions will be made and what the consequences will be What happens when a piece of code deletes another piece of code and e ectively ‘kills’ a machine? Will it be put on trial? There is a lot of potential for AI but also, currently, a lot of unanswered questions. As long as we focus on the technology behind AI and not the specific reasons for its existence, we will be fine.