Signals, forces and trends

Good futurists don’t predict the future: they uncover underlying trends and forces that disrupt the status-quo. So what does Futurist Amy Webb see? The end of ownership, the rise of wearables, synthetic biology and the role for CSPs in all of it. Amy explores these and more in our Know, now report and this podcast.

Below is a transcript of this conversation. Some parts have been edited for clarity.

Michael Hainsworth: Since 1899, US patent office commissioner, Charles Duell, has been quoted as saying everything that can be invented has been invented. Duell is held up as an example of why never predict the future. It turns out Duell was trying to make the exact opposite, invention and innovation will never end. Amy Webb is a futurist but don't ask her to predict the next big thing. While 5G, the Internet of Things, and artificial intelligence are coming together to usher in the fourth industrial revolution, Webb says her job and the job of the C-suite in the telecom industry is to envision what if scenarios, then plan for those scenarios.

Amy Webb: That's right, Michael. Futurists, contrary to what a lot of people think, don't actually predict the future and there's a very good reason for that. The math doesn't work out, there are just far too many data points, too many signals for us to consider at any one given time. I don't think that we're living in Elon Musk's matrix of predetermined futures. So for that reason, our job is really not about predictions. It's about reducing uncertainty so that leaders can make better decisions in the present.

MH: So you're working with Nokia to look at the big forces, the signals, the trends that may be disruptive to the telecom industry. What's your process?

AW: We begin with asking a lot of questions to try to understand, because there's limitless numbers of forces, signals and trends at any one given time better influencing the future of telecommunications. So we have to narrow the scope a little bit, but from there, it's a process that involves qualitative and quantitative data. So, we begin by going very broad. We use a model called the 11 sources of macro disruption and change. We're looking at things like the future of wealth distribution, education, the environment, demographics, all of these things at some point intersect with telecommunications. So, we start by looking for signals of change there and from those massive, major forces of change, we're able to then use another framework to identify long-term trends that everybody in the industry should be paying attention to going forward. That's the result of both qualitative assessments, but also lots of quantitative modeling.

MH: With a multi-verse of possible scenarios, what is it about a trend or an underlying force that leads you to go, "A-ha, eureka. Let's focus on that."

AW: Well, this is a lot of companies get things wrong. It's easy, especially now with so much change, to get distracted by the latest cool whizzbang object, or the latest, shiny thing. In our case, we're really looking for a series of criteria. Does it represent a fundamental shift in human behavior? Will it take some time to evolve as it is emerging? Is it connected to one or more of those big areas of change? And in some way, does it cause a multiplier effect in other industries, in other spaces? So these types of trends that we look at are longitudinal in nature. They don't come and go over a year or a couple of years, these are fundamental shifts in human behavior and how we relate to technology, and then ultimately how technology is used.

MH: So then, when we come to an understanding about a trend or a force, regardless as to whatever industry we're in, how must we respond?

AW: Well, because there's still so much uncertainty, these trends don't tell us the future. They give us some way points to navigate the future. So the best thing to do when you encounter trends is to start having strategic conversations, to determine what does this tell me now about our organization? What new insight do we have? How do our current mental models about our organization, about our business, how do they need to change? And I think importantly, what are the next order impacts and consequences of these trends? And from a strategy point of view, are we invested in the right places? Do we have the right workforce? Are we making the right decisions? And are we willing to go far enough out into the future to imagine what alternative realities might look like? I think the single best use case for trends is to use them to confront cherished beliefs that are deeply held within an organization.

MH: So you believe that things as a service, or X as a service, is the beginning of the end of asset ownership? If we are moving to that subscription economy, what do we need to know as an enterprise or as a telecom operator to support it?

AW: Well, one thing we know to be true is that the way people are acquiring devices, using devices, is changing pretty rapidly, whether that's an individual phone, which technically you could buy, but almost everybody now has some type of subscription model. They're paying off that phone in installments, as just about everybody knows. So, we're moving away from outright ownership where you buy something and pay for it all at once.

We're also moving away from the ownership of media itself, with the advent of all of these streaming services, whether that's for music and movies and shows, or for gaming. So, the movement away from owning devices to instead paying to access those devices tells us that there's going to be an acceleration in the number of touch points and interactions people have with a broad constellation of devices. Because if it's the case that you no longer have to buy and own everything, whether that's your phone and your car, and a handful of other things that you might have, but rather pay to use them or pay to access them, that means that there's going to be an acceleration effect on what the whole device ecosystem looks like.

MH: You said, constellation of devices. I can just imagine it, I think if I took all of the toys, all of the gadgets, all of the things I've got now and spread them out in front of me, it would feel like I’m looking at a star field. For a CSP, they would have to take all of that kind of thing into consideration because I'm just one guy. But then when you multiply it against an entire cadre of customers, this is going to require a fundamental shift, is it not?

AW: You hit the nail on the head there. If we were to get into a time machine and go back to the year 1990 and look at what was in your bag and look at what was in my bag, we're both pretty techie people. My assumption is we both had some type of music player, whether that was a Walkman, or a MiniDisc player, or a CD player. I know that I had a Toshiba Satellite Pro. Some of you may remember those things weighed like 15 pounds and it doubled as a self-defense weapon. In the early '90s we had laptops, towards the middle, end of the '90s, we had GPS devices. We had digital cameras, some of which used actual floppy disks. We were carrying around a lot of stuff.

20 years later, all of that functionality now is in one device, our cell phones. And that one device right now has more compute powering it than all of those devices combined 20 years ago. So, I recognize that from a CSP's point of view, it's really hard to imagine a future in which we'd go back to having all of these different things on us or with us all the time. But if you look at the data, and I know this is not comfortable for everybody because it challenges a core belief, but if you look at the data, what do the data show us? People aren't buying phones, brand new phones, the way that they used to. That makes sense. They're super expensive.

My current smartphone costs more than the last pretty nice laptop that I bought. So people aren't racing out to buy new phones the way they used to and there's not a lot of new functionality baked into these phones anyways. So what are we seeing instead? Proliferation of wearable devices. So at the moment, that means rings and wristbands and watches. But what we know is on the horizon are many, many more devices that are both on you and near you to help you get through your day. So, that's going to be things like smart glasses, but also smart washing machines. Anything with an IPv6 device is a connected device that people will use in some way to make their days easier, more delightful, more enjoyable.

MH: You mentioned IP6, internet protocol 6, which replaces internet protocol 4. We skipped an entire digit and went straight to six because we recognized we were creating the Internet of Things and that we were going to need not hundreds of millions of unique IP addresses, but billions upon billions of unique IP addresses. That sounds to me like an example of the telecom industry having a forward-thinking approach to things, looking at that potential constellation that was coming down the road and getting ahead of it. As a Canadian, we have an analogy that we like to use all the time, because we are big hockey fans, which is we don’t skate to where the puck is but where it’s going.

So for a CSP, let's think about sort of skating towards where that puck is going to be. Elon Musk launches, Starlink. Amazon's expected to get into the internet service provider business. How does free broadband or satellite-based internet service act as a potential new disruption for an SME and a CSP?

AW: So again, these challenge our current assumptions because would Elon Musk really give away the internet for free using Starlink? And even if he did, would it be usable? Because right now in a lot of places where Starlink is being used, connection's kind of janky, and similarly, why would Amazon spend all the money? I mean, everybody listening to this knows better than anybody the costs associated with upgrading networks and just building them. Who in their right mind would go through the trouble of building all of this to give it away for free? This is where you have to ask those questions.

So what would it take in the future for a free internet given away by Bezos or by Elon Musk to be a responsible decision for those companies? So if you stop and think about the end result, what does that tell us? It tells us that the data are more valuable within those networks than whatever subscription price people might pay to access. We're already starting to see that here in the lower 48. So very recently, Amazon's sidewalk network work went live and, from a tech point of view, it's kind of cool. So, it's a mesh network operating at the scale of a neighborhood, kinda interesting, doesn't necessarily threaten your average CSP. But if you start chipping away at maybe what this bigger strategy is, all of the devices, not just Alexas, but also the doorbells, and the tags, and everything else that might be within this mesh, are connected and they're pooling and sharing IP or bandwidth.

But what's the next order impact of this? Well, most cities have struggled to implement a smart city infrastructure. There's a lot of reasons, and it's not just in the United States. Politically volatile, not everybody understands what a smart city infrastructure is, there's a lot of vendors to deal with, there's just a lot, but there are different city departments that want those data. So what has Amazon done in a very clever way, that is an absolute strong signal threat, I think, to CSPs? They've circumvented it.

The neighborhood where I live, lots of people have Ring cameras. Lots of people have Alexa devices. The city police department uses those data. I mean, Amazon has basically built a smart city, exploiting a loophole, by asking consumers to buy stuff which they connect on their own and they're building from the ground up. So, if there's that much of a seismic shift already underway and it's business as usual for those companies that otherwise would have provided access, that tells us that there's a potential business disruption that's already happening. Now, the goal for managers is to figure out what do we do next? Because we're at the beginning of that disruptive process.

MH: And what is that next step?

AW: Well, it depends on so who you are and where you are. So the next step really is to figure out, in a world in which devices are, in some cases, subsidized, we have the emergence of new types of networks that either give bandwidth away for free, give connectivity away for free in some way, or in total. And we're moving into a future in which all of these connected devices can also be rented out. I mean, you can rent out the unused compute on these devices, that just creates a challenge, but I also an opportunity, for CSPs. The challenge of course, is that if you wait and do nothing, that makes you vulnerable, it makes your current business models more brittle.

But if you decide to try to take some type of action right now, whether that's simply exploring all of the disruption that's happening in a meaningful way and getting to action, or adjusting your business models accordingly, or better yet, anticipating what those future consumer needs are and meeting them in that new reality, then you don't have to worry about squeezing consumers more to extract more money out of them as the primary driver for your margins and your profit. Instead, what you wind up with is a whole bunch of new ways to earn revenue. You wind up with tons of new profit centers, viable ways for your business to grow and to expand, but to get there requires a different mental model than a lot of CSPs have today.

MH: Want to talk about one of those potential revenue sources coming in the door. And it seems like we're going to zig when we want to zag, but one thing you've been focused on lately is synthetic biology. I suppose we should first step back and define the term before we discuss the impact.

AW: Sure. This is a weird one and I know it feels completely unrelated to everybody who's probably listening to this, so bear with me here. When we talk about synthetic biology, this is using biotechnology to redesign organisms, or in some cases to design them from scratch, for new and improved purposes. So, this involves engineering, artificial intelligence, computer vision, computer science, biology, genetics. It's a new discipline. It's not super new, I mean, it's been around now for 20 years or so, but the key difference today is there's finally the compute. There is a lot of investment and we have some seriously amazing use cases. One of which probably everybody is familiar with, and that's the vaccine for coronavirus. The messenger RNA vaccine that is made by Pfizer BioNTech and Moderna are within the realm that that's possible because of synthetic biology.

So synthetic biology at some point changes the game for agriculture, totally changes our approach to the global supply of food. It makes it possible to grow at scale indoors, all of the stuff that we'll need. It totally changes the game for the stuff that you eat. So, whether that's fish, or poultry, or beef, or pork, this isn't about creating a plant-based version of meat and trying to approximate that experience. It's actually starting with the cells of those animals, but then using a bio-reactor to create the same output just without ever involving any actual animals. This potentially means in the future, in the near future, our glasses no longer scratch. Michael, you and I are both wearing glasses, and I'm sure you've scratched yours before. I've certainly scratched mine. Self-healing coding, self-healing materials, and on and on and on, and we didn't even scratch the surface on medicine.

All of this requires automation because it requires precision. In most of these places, it's a lab that requires high throughput with computers, no lag, really great connectivity, and also the metadata from these networks. There is a huge opportunity, huge, around the corner for CSPs, for everybody working in telecommunications. But it's one of these things that's too far outside, so nobody's really paying attention to it. It also means that others are paying attention and could swoop in before you have an opportunity to get there.

MH: Right, so synthetic biology maybe version 1.0 was the seedless watermelon, which we cut back in the olden days. Today, there seems to be a lot more focused when it comes to synthetic biology on designer babies and the fears of that sort of thing. But as you say, you're more focused on designer rutabagas, bringing the global food supply indoors. This is very much an industry 4.0 conversation. There is definitely a role for the telecom industry in that.

AW: Yeah and actually I would say, so synthetic biology 1.0 was more like creating insulin.

MH: Oh, you're going even further back?

AW: Yeah, so the reason that insulin exists today, that was actually one of the first big success stories. The second had to do with a malaria medication that was synthesized out of sweet wormwood, which was just hard to grow. So, this is not fantasy world stuff and it's certainly not, the musings of optimistic, utopian science fiction thinkers. This is all happening.

The way to think about this is, especially for those of you and telecoms, if you'll remember Chickering Hall, when the very first telephone conversation happened in New York, and people were so blown away by what they had seen with the telephone on stage, that they demanded to go behind the curtain because they thought it was all an elaborate hoax, a big trick. Of course it wasn't, it just so challenged the mental model that people had of how you would transfer a voice, how you could transfer sound, that they had a hard time understanding what they were seeing.

But think about what happened since that time, we wound up with transatlantic wires, we wound up with the ability to make phone calls. We wound up with satellites in space. I mean, I don't even know that you really could create a meaningful valuation of the entire telecommunications industry at this point, because it's a basic technology. The rest of the world doesn't exist without telecommunications. The Chickering Hall stage is where we are right now with synthetic biology, which means, as some of you know very well, if you've got the picks and the shovels and the axes, and you know how to help build that economy out, you're going to do really well. But even if you don't participate, that thing's going without you and it's going to change nearly every other industry.

MH: So the picks and the shovels in this scenario of food security that comes from synthetic biology, these would be the plethora of sensors. This would be artificial intelligence. These would be those machine learning algorithms necessary to compute that remarkable amount of data that comes in as we work in the synthetic biology.

AW: It's not just the components, it's not just the algos. There is a missing layer of infrastructure, and that brings me back for a moment to Starlink and to Elon Musk. So this is what a futurist does, we look at signals and forces to try to anticipate where change is coming from. We know that climate change is happening. We know that we have crazy, extreme weather events. As we are talking, right near where my dad lives in a city, a tornado touchdown on the same day, American Airlines announced that it was canceling hundreds of flights because of extreme weather events and Palm Springs just recorded its hottest day in history.

This isn't a blip. We see these stories more and more. There's just more energy in the atmosphere, so things are going to be uncertain when it comes to climate and weather and travel. What does that mean? It means it's really hard to predict your crops. If you're in a situation where you don't entirely know what the weather's going to be like, and we know that overall temperatures are rising, it makes farmers' jobs that much more difficult. And we have the new viruses popping up, and we have challenges with our geopolitics and our global supply chains.

All of this tells us that there is an opportunity to try to reduce some of that uncertainty. If you can bring some of that agriculture, either to a new place, or to an indoors place where you have that critical mass of talent, then you solve part of that problem. The challenge is we don't currently have the connectivity where some of that could be happening. So again, it's an opportunity because somebody going to get there and build out the infrastructure that's required.

MH: Let's come full circle on this conversation. As the listener, walking away from what we've discussed over the course of our time together, what would be the one thing you would want them to walk away with knowing, more than anything else when it comes to looking towards the future and again, trying to skate to where the puck is going?

AW: Technology has become more complex, but so have the businesses and the ecosystem that surrounds all of this. I think that for everybody in the telecommunication space, probably up until this point, network complexity has been a challenge. You've got different people walking around with different phones. That's hard, it's expensive, it's costly, hard to manage and therefore, you're putting out fires all the time. If you can zoom out a little bit, if you could zoom out a lot, and look at the change that's happening outside your company, outside of your industry, you're going to see tremendous risk and tremendous opportunity that affect you as an organization.

The one thing that I hear over and over again from people in telecommunications is that somehow they missed it. They felt hamstrung, and then they somehow missed the next thing that was coming. The next thing that's coming that directly impacts you is not coming from within your industry. It's an outside force and there's a lot of outside forces. So the one thing that I hope you take away from our conversation is a strong desire to start looking at those forces, signals and trends outside your company, outside those industry reports, outside the industry itself, and try to map those back to the decisions that you're going to have to make in the present to prepare for that future as it unfolds.

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