The future is foggy but there are signposts
What a difference a quarter makes. After a 10-year global bull market in equities, the last three months of 2018 were a painful reminder that what goes up, can also go down.
They were most painful for the people who found actual risk a lot tougher than theoretical risk, and bailed out of the markets during the quarter.
Those that did locked in losses of up to 10 per cent as the S&P 500 index fell to its lowest in nine years and the MSCI wiped almost two years of gains.
Roll on 2019, which most – myself included – predicted to be a continuation of corrosive investment returns. But no.
With the Fed reversing its position on quantitative tightening, the market responded with bullish enthusiasm.
The MSCI world index gained 2 per cent in the first week of April while the MSCI emerging markets index did 2.6 per cent. That’s in one week.
Total first quarter growth across those two indices was 14.1 per cent and 12.4 per cent respectively. In other words, the global equities markets have just delivered their best quarter since the 2009 global financial crisis.
If we ever needed a reminder that you can’t predict the future, the past three months have done that with a fiscal slap on the face.
Future Today Institute chief executive and global tech trend rockstar Amy Webb made the same point when she released her 2019 Tech Trends Report recently.
She is adamant there no such thing as ‘‘predicting’’ the future, a strange position for a quantitative futurist.
Webb reckons the best we can do is to listen to signals about emerging technologies in the present, to recognise patterns early, and to build out scenarios
that describe implications. Her key thesis is that it is the convergence of those signals, and those in adjacent industries that will most impact futures.
I was lucky enough to attend the launch of the report with about 2500 others in Texas a month ago.
As usual Webb didn’t disappoint. Her opening salvo charted a catastrophic future for Walmart as a result of convergence around genome editing, 4D printing, online groceries and smart farming.
Webb’s annual gift to the industry (she shares the research to all via a creative commons attribution licence) consists of no less than 315 defined trends, a dizzying number. Distilling this down into meaningful takeaways for business I reckon there are four key themes across the convergences.
First, privacy is dead. The reality is that we are under surveillance everywhere. From how hard we push on our phones, to genetic match-ups with distant relatives, to artificial intelligencedriven listening devices in our kitchen through to which roads we drive on.
Going forward, just by being alive you will be monitored. This brings huge challenges for the watchers around storing the massive data, safeguarding it and agreeing on best practice for anonymising it.
Second, voice search optimisation (VSO) is the new search engine optimisation (SEO).
By the end of 2020 half the interactions you have with computers will be via your voice. In the near future we will speak more than we type.
This means content creators need to move into VSO and do it at pace. This will impact advertising, hospitality, tourism, banking and education. It is likely the first movers into the VSO ecosystem will reap serious rewards.
Third, nine companies will be the architects of our internet future as far as artificial intelligence is concerned.
Six are American – Google, Microsoft, Apple, Facebook, IBM and Amazon – known as G-Mafia. Three are Chinese – Baidu, Alibaba and Tencent (known as BAT). These nine companies own close to two-thirds of research, funding government support and consumer applications when it comes to artificial intelligence (AI). This ranges from simple suggestive algorithms to complex deep learning programmes.
This means that when businesses need to choose AI platforms they will be likely one of these, and once chosen that will be very hard to reverse.
Lastly, personal data records (PDRs) are coming. PDRs will provide a single unifying ledger that includes not just all the data we create as a result of our digital usage (like social media and search) but also deep web storage of
Privacy is dead. The reality is that we are under surveillance everywhere ... This brings huge challenges for the watchers around safeguarding the data.
things like school and work histories, legal records, finance records, travel, health and shopping history.
According to Webb, AI will learn your PDR (whether it be blatantly or latently) and use it to automatically make decisions for you. Encouraging you towards vegetables rather than red meat if it thinks you’ve got a heart risk.
Recognising when you are likely to feel road rage and restricting torque delivery in your car. The possibilities are endless and slightly creepy.
Put it all together and you know the pace of change is accelerating again.
While you can’t predict market movements, you can ensure you have asset diversification, an updated risk profile and liquidity.
Likewise, while no business knows exactly how technology is going to impact its operations, it’s a no-brainer that it will. That means they need to read the signals, and take a couple of bets.
Webb’s future trend report provides a useful kickoff point to consider what those bets might be.
Mike ‘‘MOD’’ O’Donnell is a professional director and adviser. His Twitter handle is @modsta and he’s trying to get better at seeing convergences.