The Next Dis­rup­tive Wave: Hu­man Aug­men­ta­tion

Tech­no­log­i­cal dis­rup­tion goes back to the first In­dus­trial Rev­o­lu­tion. Re­cent waves in­clude mo­bile, so­cial and sen­sors. Up next: Hu­man Aug­men­ta­tion.

Rotman Management Magazine - - CONTENTS - Com­piled by An­drea Pot­ter, Gau­tam Jaggi and Pri­anka Srini­vasan

Tech­no­log­i­cal dis­rup­tion goes back to the first In­dus­trial Rev­o­lu­tion. Re­cent waves in­clude mo­bile, so­cial and sen­sors. Up next: Hu­man Aug­men­ta­tion.

to the smell of waf­fles hot from her kitchPARI AWAK­ENS IN LON­DON en’s 3D printer. Her vir­tual per­sonal as­sis­tant, Martin, says good morn­ing and men­tions that it’s cold out­side. He tells her that he’s pur­chased the sweater she’s been ad­mir­ing and it has just been drone-de­liv­ered. Af­ter she gets dressed, her driver­less taxi ar­rives. Dur­ing the com­mute, she en­joys a vir­tual-re­al­ity (VR) call with her hus­band, who is trav­el­ling over­seas.

When Pari ar­rives at her shared of­fice space, she is no­ti­fied that three dif­fer­ent com­pa­nies have req­ui­si­tioned the ser­vices of the free­lance col­lec­tive to which she be­longs. One re­quest orig­i­nated in China and has al­ready been trans­lated. On her way home af­ter work, Pari’s im­planted mi­crochip alerts Martin to a high choles­terol read­ing. Martin an­nounces that he has booked an ap­point­ment with a vir­tual doc­tor and has pre-emp­tively re­vised her menu plan. That evening at home, Martin ports Pari into her favourite VR video game. Later, as she goes to bed, Martin plays a sooth­ing sound­track. The songs have been com­posed by an agent that un­der­stands Pari’s mu­si­cal tastes and cur­rent emo­tional state. As Pari sleeps, Martin plans her next va­ca­tion.

Wel­come to the era of hu­man aug­men­ta­tion. Few would ar­gue that we live in in­ter­est­ing times. Sur­rounded by the ev­ery­day mir­a­cles of smart­phones and sen­sors, we are so in­un­dated by sto­ries about driver­less cars that they al­ready seem like old news — years be­fore any­body in the world has even owned one. Now, con­sider some­thing that is fur­ther in the fu­ture but truly un­prece­dented and rev­o­lu­tion­ary: We are en­ter­ing the era of hu­man aug­men­ta­tion.

While technology has al­ways aug­mented hu­man ca­pa­bil­i­ties, the tech­nolo­gies that are now com­ing into their own, in­clud­ing ar­ti­fi­cial in­tel­li­gence (AI), ro­bot­ics, au­ton­o­mous ve­hi­cles (AVS) and Blockchain, prom­ise to go fur­ther. Th­ese break­throughs are in turn gen­er­at­ing new prod­ucts and ser­vices, such as AVS, drones, ro­bots and wear­ables. For the first time in hu­man his­tory, tech­nolo­gies will be able to act au­tonomously on our be­half, with far-reach­ing con­se­quences for ev­ery­thing from work to mar­ket­ing to reg­u­la­tion.

On a daily ba­sis, we are bom­barded with more data than our brains can process. AI al­ready acts as an in­tel­li­gent ‘con­sul­tant’, help­ing us make sense of this cog­ni­tive bur­den, from cu­rat­ing read­ing lists to nav­i­gat­ing driv­ing routes. Hu­man aug­men­ta­tion tech­nolo­gies will soon as­sume even more agency by driv­ing cars, au­tomat­ing jobs and mak­ing re­tail pur­chases. In do­ing so, they will blur the line be­tween hu­mans and machines, re­align­ing so­ci­etal norms and chal­leng­ing en­trenched per­cep­tions of our­selves.

The Rise of the Su­per Con­sumer

The evo­lu­tion and in­ter­play of AI, ma­chine learn­ing, ever-present sen­sors, smart de­vices and new com­put­ing in­ter­faces will take con­sumer em­pow­er­ment to a whole new level — giv­ing rise to to­mor­row’s Su­per Con­sumer. A lit­tle like the fic­tional su­per­heroes of comic books, su­per con­sumers can be de­fined as those who em­brace new tech­nolo­gies such as AI, vir­tual re­al­ity, wear­ables and ro­bot­ics to cre­ate smarter and more pow­er­ful ex­ten­sions of them­selves. Whether work­ing, play­ing, eat­ing, shop­ping, learn­ing or pur­su­ing health­ier life­styles, to­mor­row’s su­per con­sumers will be aug­mented by technology in the ser­vice of achiev­ing more in­formed and rich ex­pe­ri­ences across th­ese dif­fer­ent cat­e­gories of liv­ing.

The ex­pec­ta­tions of to­day’s con­sumers are al­ready high and ris­ing: Peo­ple ex­pect their brand ex­pe­ri­ences to be uni­fied and el­e­gant across all touch­points; they want to be rec­og­nized as in­di­vid­u­als, have their likes and dis­likes un­der­stood and re­mem­bered, re­ceive ad­vice per­fectly aligned to their in­ter­ests and pur­chase highly per­son­al­ized prod­ucts and ser­vices. They ex­pect technology to help, not hin­der, their quest to get what they want, where and when they want it. And, the price of a mis­take is high. For­rester re­ports that con­sumers who ex­pe­ri­ence dis­gust, anger or a feel­ing of ne­glect dur­ing a neg­a­tive brand in­ter­ac­tion are eight times more likely not to for­give that com­pany than those who ex­pe­ri­ence other forms of poor in­ter­ac­tion.

While con­sumers’ ex­pec­ta­tions are high, re­al­ity lags be­hind — and some of the mis­match is technology-re­lated. To­day’s AI is good at per­form­ing nar­rowly-de­fined tasks, but less adept at com­plet­ing gen­er­al­ized in­tel­li­gence tasks that re­quire hu­man­like rea­son­ing: The mul­ti­tude of ‘smart’ de­vices and sys­tems on the mar­ket can­not in­ter-op­er­ate and quan­tum com­put­ing is im­ma­ture and can­not, at present, meet the mas­sive de­mand for ad­di­tional pro­cess­ing power that in­creased data flows and so­phis­ti­cated al­go­rithms will re­quire.

The rise of the su­per con­sumer will be a world­wide phe­nom­e­non, but could play out at dif­fer­ent speeds and lev­els of com­plex­ity across the world. AI in­vest­ment and adop­tion has in­creased dra­mat­i­cally in both China and In­dia over the past few years, sug­gest­ing that Asia might well lead the way in terms of gen­er­at­ing new su­per con­sumers. At the same time, per­sis­tent eco­nomic in­equal­ity and in­fra­struc­ture dis­par­i­ties across the globe (and within na­tions them­selves) could lead to a class of dis­em­pow­ered con­sumers who fail to ben­e­fit from the AI rev­o­lu­tion.

In Europe and the U.S., con­cerns about pri­vacy and the

Tech­nolo­gies will be able to act au­tonomously on our be­half, with far-reach­ing con­se­quences.

own­er­ship of one’s per­sonal data are more than just a rum­ble, es­pe­cially amid sto­ries about high-pro­file data breaches, fears of gov­ern­ment abuse of per­sonal data and tales of per­sonal vir­tual as­sis­tants spy­ing on their own­ers. Will con­sumers con­tinue to re­lin­quish con­trol of their data to providers in ex­change for free ser­vices? Or, will part of be­com­ing a su­per con­sumer in­volve mon­e­tiz­ing one’s own per­sonal in­for­ma­tion?

Gen­er­a­tional dif­fer­ences may blunt some of th­ese con­cerns. Af­ter all, dig­i­tal na­tives have grown up in an en­vi­ron­ment where per­sonal data is read­ily ex­changed for con­ve­nient ser­vices and unique ex­pe­ri­ences. And, em­pow­er­ment may not look as it does now. With the ar­rival of the In­ter­net, con­sumers be­came di­rec­tors of their own lives while sit­ting at key­boards and tap­ping on phones. But it’s a dif­fer­ent kind of em­pow­er­ment when peo­ple opt to be­come pas­sive as com­put­ers make de­ci­sions for them. Some con­sumers may re­sist be­com­ing ‘owned’ by one of the emerg­ing AI ecosys­tems or del­e­gat­ing de­ci­sions to th­ese ecosys­tems.

Ris­ing ex­pec­ta­tions put the onus on com­pa­nies to in­no­vate now with to­mor­row’s su­per con­sumer in mind. Seam­less de­liv­ery of pleas­ing ex­pe­ri­ences across phys­i­cal and dig­i­tal realms, as well as dis­parate chan­nels and de­vices, is the goal. Reach­ing it will re­quire the right mix of new technology in­vest­ments, es­pe­cially those that will yield valu­able data on cur­rent and prospec­tive con­sumers.

Be­yond de­ter­min­ing the right mix of technology in­vest­ments, com­pa­nies must also re-en­gi­neer their busi­ness pro­cesses and op­er­a­tions to achieve a holis­tic view of the con­sumer across the en­tire brand jour­ney, con­nect­ing frag­mented tech­nolo­gies and data si­los as part of this ef­fort. The ecosys­tem of data providers and agen­cies that sup­port mar­ket­ing should also be in­te­grated. But, ul­ti­mately, com­pa­nies that thought­fully con­sider what it means to be hu­man in an in­tel­li­gent ma­chine era will cre­ate the brands that at­tract su­per con­sumers. Hu­mans are ver­bal and con­ver­sa­tional, as well as emo­tion­ally driven. From their providers, they want rel­e­vant and trusted in­ter­ac­tions, fric­tion­less trans­ac­tions and rich ex­pe­ri­ences. The com­pa­nies that can lever­age technology and de­sign to meet th­ese cri­te­ria will be best po­si­tioned to serve to­mor­row’s su­per con­sumer.

The Role of Be­havioural De­sign

In re­cent years, two trends have moved the dis­ci­pline of Be­havioural Eco­nomics — which iden­ti­fies bi­ases in hu­man eco­nomic be­hav­iour — from the cor­ri­dors of academia to main­stream mar­ket ap­pli­ca­tions. First, many so­ci­etal chal­lenges

Will be­com­ing a su­per con­sumer in­volve mon­e­tiz­ing one’s own per­sonal in­for­ma­tion?

ag­gra­vated by be­hav­iour — cli­mate change, chronic dis­eases and ex­ces­sive debt — are be­com­ing in­creas­ingly ur­gent and ex­pen­sive. Sec­ond, mo­bile and so­cial plat­forms are mak­ing it pos­si­ble to mea­sure and guide be­hav­iours in real-world, real-time con­di­tions like never be­fore.

The next wave of tech­no­log­i­cal dis­rup­tion, hu­man aug­men­ta­tion, will raise this chal­lenge to a whole new level. While mo­bile and so­cial plat­forms have been trans­for­ma­tive in chang­ing be­hav­iour in real-time and real-world con­di­tions, they still rely on hu­man in­ter­ven­tion. Hu­man aug­men­ta­tion tech­nolo­gies prom­ise to change that. To­day, in­di­vid­u­als man­ag­ing their diet may need to con­stantly re­mem­ber to en­ter meal de­tails and calo­ries in an app. In the fu­ture, AR could elim­i­nate this step as smart eye­glasses and smart dishes au­to­mat­i­cally iden­tify and cap­ture meal data, en­abling mo­ti­va­tional ‘nudges’ based on more ac­cu­rate and com­plete real-world in­for­ma­tion.

AI could en­able per­son­al­iza­tion to a de­gree never be­fore pos­si­ble. For ex­am­ple, ‘dig­i­tal twin’ avatars could show in­di­vid­u­als the long-term con­se­quences of their health de­ci­sions. Achiev­ing this vi­sion would de­liver sig­nif­i­cant so­ci­etal ben­e­fits, but get­ting to this op­ti­mistic fu­ture will re­quire tremen­dous fo­cus on be­havioural de­sign: de­sign­ing prod­ucts, fea­tures, in­ter­faces and mes­sag­ing that ac­count for the cog­ni­tive bi­ases that hu­man aug­men­ta­tion tech­nolo­gies are likely to trig­ger.

Be­havioural Eco­nomics of­fers three im­por­tant in­sights for or­ga­ni­za­tions as they en­ter the realm of hu­man aug­men­ta­tion.

Hu­man aug1. WE ARE PRE­DIS­POSED TO FEAR NEW TECH­NOLO­GIES. men­ta­tion is spark­ing fears about ev­ery­thing from job losses to AV safety to the prospect of self-aware AI that threat­ens hu­man­ity. While ev­ery new technology cre­ates some risks, sev­eral cog­ni­tive bi­ases pre­dis­pose hu­mans to over­es­ti­mate such threats. Prob­a­bil­ity ne­glect leads us to fo­cus on the mag­ni­tude of out­comes (e.g. dy­ing in a car crash) rather than their as­so­ci­ated prob­a­bil­i­ties (e.g. au­to­mated ve­hi­cles are sta­tis­ti­cally safer than hu­man driv­ers). To the ex­tent that we process prob­a­bil­i­ties, we tend to over­es­ti­mate small chances. The avail­abil­ity heuris­tic leads peo­ple to fo­cus on and ex­ag­ger­ate the im­por­tance of read­ily avail­able in­for­ma­tion. So, the bar­rage of news cov­er­age about a sin­gle Tesla crash drowns out a sea of un­der­ly­ing data about AV safety. AI and AVS are al­ready trig­ger­ing such fears, and we ex­pect more as tech­nolo­gies such as pas­sen­ger drones and brain-ma­chine in­ter­faces come into their own.

The il­lu­sion of con­trol bias pre­dis­poses 2. CON­TROL IS IM­POR­TANT. us to want to feel that we have con­trol, even in sit­u­a­tions where we don’t. The ‘close door’ but­ton in many el­e­va­tors, for in­stance, does not af­fect how soon el­e­va­tor doors shut; it merely gives users a sense of con­trol. This as­pect of hu­man psy­chol­ogy will be­come in­creas­ingly rel­e­vant as hu­man aug­men­ta­tion tech­nolo­gies start act­ing on our be­half. For in­stance, AVS could, in the­ory, en­able a com­plete re­design of au­to­mo­tive cab­ins to look more like liv­ing rooms, but the need for con­trol might in­stead dic­tate re­tain­ing steer­ing wheels and brake ped­als. Sim­i­larly, vir­tual shop­ping as­sis­tants could rein­vent the shop­ping ex­pe­ri­ence, but it is not yet clear whether con­sumers will be com­fort­able with sur­ren­der­ing con­trol over their pur­chas­ing de­ci­sions.

As AI as­sis3. LIFE­LIKE IN­TER­FACES TRIG­GER HU­MAN PSY­CHOL­OGY. tants, ro­bots and VR be­come in­creas­ingly life­like, they could

trig­ger cog­ni­tive bi­ases. We have a deep-seated ten­dency to an­thro­po­mor­phize — to at­tribute hu­man-like qual­i­ties to— inan­i­mate ob­jects. De­sign­ers have em­braced this ten­dency, for ex­am­ple, with car grills that sub­tly evoke a hu­man smile. Ro­bots and AI as­sis­tants will take an­thro­po­mor­phism bias to a whole new level, with im­pli­ca­tions for user adop­tion and en­gage­ment.

An­thro­po­mor­phic de­sign in­sights are al­ready emerg­ing. For in­stance, stud­ies find that dig­i­tal as­sis­tants are more like­able if they make small mis­takes in­stead of op­er­at­ing flaw­lessly — a re­sult known as the prat­fall ef­fect. An­other bias, the un­canny val­ley, leads peo­ple to feel re­pulsed by ro­bots or VR im­ple­men­ta­tions that ap­pear al­most, but not quite, hu­man. This sug­gests that de­vel­op­ers might keep prod­ucts from be­com­ing too life­like in the short run. Our ten­dency to an­thro­po­mor­phize also raises con­cerns that our be­hav­iours with life­like machines might in­flu­ence how we be­have with other hu­mans. For in­stance, will the li­cense to be­have cru­elly to­wards a robot de­sen­si­tize us in the way we treat each other?

In clos­ing

Be­sides free­ing us from mun­dane work, the com­bi­na­tion of ar­ti­fi­cial and hu­man in­tel­li­gence will drive break­through dis­cov­er­ies. Hu­man cre­ativ­ity and judg­ment aug­mented by the brute com­pu­ta­tional power of AI has al­ready led to break­throughs in en­ergy gen­er­a­tion and stor­age, drug ther­a­pies for ge­net­i­cally caused dis­eases and space ex­plo­ration. Next, it could yield so­lu­tions to some of hu­man­ity’s most in­tractable prob­lems.

What lies be­yond could be even more trans­for­ma­tive: A con­ver­gence of in­for­ma­tion technology, biotech­nol­ogy and nan­otech­nol­ogy that prom­ises to over­haul the very def­i­ni­tion of what it means to be hu­man. Neu­ro­pros­thet­ics, brain-ma­chine in­ter­faces, DNA edit­ing, in­gestible nanobots and em­bed­dable ra­diofre­quency iden­ti­fi­ca­tion (RFID) chips are still in labs. But, in the not-too-dis­tant fu­ture, they may be­come the tools that up­grade us from or­ganic to bionic. Only one thing is cer­tain: The era of hu­man aug­men­ta­tion is just be­gin­ning.

This ar­ti­cle has been adapted from EY’S re­port, “The Up­side of Dis­rup­tion: Mega­trends Shap­ing 2018 and Be­yond”, which is avail­able on­line. The sec­tions ex­cerpted in this ar­ti­cle were writ­ten by An­drea Pot­ter, Gau­tam Jaggi and Pri­anka Srini­vasan, an­a­lysts at EYQ, EY’S global think tank ded­i­cated to ex­plor­ing ‘what’s next af­ter what’s next?’

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