I recently attended a PwC update for NEDs on technological trends and thought I’d share some of their insights with some of my own. They say that industry is facing a revolution. Customers are demanding much more because they increasingly know, or think they know, what is possible. Decision makers are now in technology roles as well as on the front line. Jamie Dimon, Chairman and Chief Executive of JPMorgan Chase, is quoted as saying that “JPMorgan Chase is a technology company.”

Most companies probably understand the need to respond and adapt to the evolving use of technology by their customers and other key stakeholders. What they do not realise is how little time they have to address these changes.

It took more than 70 years for telephones to reach 50% household penetration in the US, compared with 28 years for radio, 18 for colour TV, 14 for cell phones and 10 for internet access. [i] This trend continues to accelerate although it will not reach the absurd infinitum of 100% penetration in hours. In 2011 Google + reached 10 million users in 16 days and 90 million by the end of the year. But then it is is used more across other Google applications and it is difficult to verify the number of genuinely active users.

The real imperative in a world where everything is digitised is that businesses need to pursue innovation to disrupt their own business model before the competition does. This is increasingly difficult for established companies where the business model may involve a legacy of long term investment in infrastructure and systems, while start-ups can avoid these things and use the agility of other peoples’ assets and resources.

PwC have identified 10 key technological forces:

PwC then recommend six practical priorities for growth:

And what is the role of the board in all this? PwC suggest three areas for focus:

There will be considerable disruption to many existing businesses and professions and it may go much wider than most people think. The challenge for businesses is to face the implications of digital change: in particular the loss of control over customer relationships, increased competition and threat of commoditisation, and the need to engage digitally not just with customers, but also with suppliers, partners and employees.

The starting point is a structured approach that assesses your digital maturity based on an understanding not just of the technology but a much wider, holistic view of exactly what digital engagement means to the business.

Digital applications are becoming increasingly influential in our lives but don’t play by the same rules as traditional companies. Some technology companies are not job creators but job destroyers. Google is seven times the size of General Motors but employs fewer than 25% of its workers; WhatsApp is worth $19bn but has 55 employees; Instagram was worth $1bn when Facebook bought it and had 12 employees at the time.

The issue of work displacement will have profound effects on society, particularly when ironically technology is also enabling instant and unfiltered information. Economists argue that while AI will lead to machines taking over more and more jobs new ones will be created. This is no doubt true but not necessarily for those who lose their jobs. The Industrial Revolution destroyed many cottage industry jobs. New jobs were created in the factories but the skilled workers whose jobs were replaced either had to accept lower paid unskilled work or did not work at all.

Technology does not always mean progress. Even when it does it can lead to losers. For example Sir Joseph Bazalgette’s marvellous development of London’s sewage system in the 19^th century was undoubted progress. Prior to that London’s sewage flowed openly into the Thames and cholera was rampant. In one year alone 14,000 Londoners died of cholera. But the men who used to collect the night soil never worked again.

AI will destroy 6% of all jobs in the US by 2021, according to research by Forrester, which shows the biggest effect will be in transportation, logistics, customer service and consumer services. A study by Oxford University suggests the top five jobs at risk of automation are loan officers, reception and information clerks, paralegals, retail salespeople and taxi drivers and chauffeurs.

Newspaper stories focus on dramatic changes like driverless cars and speculate as to what will happen to taxi, van and lorry drivers who will lose their jobs. But they should consider their own position. Much of the news could be edited by machines. Roles that involve a high level of social intelligence and original ideas are less likely to be replaced by machines, but in the total world of employment these kinds of jobs are in the minority.

Career development will be an issue. A barrister might learn his profession by working on analysis and preparing cases for his seniors to handle in court. But if this preparatory work is done by machines how does the barrister ever become a senior practitioner? Similarly an accountant will start his career on low grade number crunching on audits and other low level book keeping. When this is all done by machines and Blockchain how does he ever get to become a partner?

At the very least to prepare for this revolution people should read up on the subject and look into improving their technical skills. Young people should see the ability to write code as equally essential as the ability to write English. We need to stay on top of the technology and not let the machines design the jobs. By all means if a machine can be more accurate or safer or substantially quicker and cheaper then the machine should do the work. But in making decisions about cost we must look to the wider question of the cost to society at large of a workforce dependent on the gig economy to pick up the odd jobs that don’t suit the machines.

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