Alibaba’s Dr Ye maps the road to happiness

MOST predictions about the coming impact on our lives of technology, machine learning and big data turn into a shooting gallery where the forecasters vie with each other to see who can come up with the largest number for job losses.

Some surveys say that a fifth of business models will be obsolete within five years, so at least one job in five will disappear in that time. Others say that more than half the jobs which will be done by today’s children have not yet been invented — and there can be no guarantee that they will be.

Humans cannot cope with uncertainty and the fear of not knowing what is going to happen sends them constantly in search of someone — anyone — with a crystal ball. The scarier the forecast, the better the audience likes it because it is a psychological need which is being met, not a rational desire for hard facts.

Indeed it was once written in a book on forecasting that the success rate of economic predic tions would be immeasurably improved if everyone simply said tomorrow will be more or less the same as today.

Inevitably, however, those who tried to do that found no one would pay their speaker fee. There is, in contrast, a good living to be made on the circuit for those who can plausibly convince an audience that they know what the world will look like in five or 10 years.

An ironic aspect of this is that people worry constantly about the future, they pay remarkably little attention to what is actually happening now if it is even only slightly outside their direct line of vision.

Hence the value of a conference earlier this month organised by Cambridge Service Alliance, a co-operative ven- ture between academics at the university and several of the world’s leading companies, which is about finding solutions to business problems.

It gave a platform this year to Dr Ye Meng, a senior expert from Alibaba and he returned the favour with an eyeopening presentation of what his business is doing in China.

Most people if they think about Alibaba at all picture it as the Amazon of China, the technology platform through which that nation’s billion citizens shop online. But while that was indeed how the company started less than 20 years ago, its net now is very much broader.

Alibaba provides technology platforms which link customers, assemblers, manufacturers and designers, transforming how business is organised. “We used to talk about ‘made in Britain’, ‘ made in Japan’ or ‘ made in China’,” said Dr Ye. “Today, we talk about ‘made on the internet’.”

His thesis is that technology has created a new ecosystem. Students of economics are brought up to think of economic activity as the interaction between land, labour and capital. Today, says Dr Ye, these factors have been added to. Technology is as much an enabler as capital; collaboration and sharing dramatically alter the meaning of labour; big data and the associated information structures of the Cloud and machine learning are new factors of production.

The modern economy is a trinity of platform, sharing and the micro-economy — its hundreds or thousands of individuals collaborating through a technology platform to deliver a com- mon purpose. It is doing for business what Amazon did for shopping.

A customer searches the web for a product which, once found, is ordered because the price, the delivery time and hopefully the quality looks right. No one pays much attention to whom the supplier is, nor even if it is in this country

HAT princ iple is being applied to business. A company receives a request for a product. It has nothing in stock so it sources the components, just like an Amazon shopper. They arrive within hours and are assembled so the order is fulfilled. Hence “made on the internet”.

Contrast this with the way most businesses are organised, and have been since the industrial revolution. A firm designs a product and then forges long- term relationships with sub-contractors and independent companies to be the suppliers of the components it needs — sub-contractors may indeed design and develop the parts specifically to meet its specialised requirements. Then the company looks at the market, tries to get a feel for what the likely demand will be and sets its production levels accordingly.

If it is very lucky it gets it right, but normally it is engaged in a costly continuous adjustment, a juggling act between producing too much and having to finance unsold stock, or producing too little and seeing alienated customers buying from a competitor.

In theory all those problems disappear if you can deliver manufacturing on demand, and this Alibaba platform is the closest anyone has yet got to that, which is why it is such a revolution — and far ahead of anything in the West.

But its implications go well beyond the narrow world of corporate organisation. It also forces a rethink about how companies manage their supply chains, how people develop and exploit their ideas, how companies and people procure goods and services, and what.governs the relationships between all these parties. It challenges how the world of work, and indeed society itself, is organised.

The platform makes everything transactional; people and firms can opt in or opt out. No one need work for a company but can instead pursue their own ideas. Dr Ye’s vision is that people with talent can do what they want. The world of work, he says, will be a much happier place.

In his world, technology should be seen as a source of hope, not fear and uncertainty.

‘People worry constantly about the future [and] pay remarkably little attention to what is happening now’

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