Special Report - Technology Fueled Transformation is Just Getting Underway

By Daniel Burrus

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For many people, change is difficult and transformation even more so. According to the New Oxford American Dictionary, "change" means “to make something different,” while "transform" means “to make a thorough or dramatic change.” It is a difference of degree, I admit, but that degree is so extreme that it becomes a qualitative difference.


Changing means continuing to do essentially the same thing, only introducing some variation in degree. Build it a little bigger, smaller, faster, higher, longer. Increase the marketing budget. Add a few staff to the department. Come up with a new slogan. But today’s business problems cannot be fixed by changing, nor can organizations or industries survive simply by changing. Embracing change is no longer enough: We need to transform.

Transformation means doing something utterly and radically different. It means nanofusion; it means using algae as a fuel source; and reimagining GM on the Dell model. In the early 1990s, Barnes & Noble superstores changed how we shop for books. By the mid-1990s, Amazon was transforming how we shopped for books, which then transformed how we shop for everything.

If you’re a Baby Boomer, you likely remember listening to music on long-playing vinyl disks. When eight-track tapes and then cassette tapes came out, that was a great change: now you could hear the music in the car. When the industry moved from LPs and cassettes to CDs, that was an even better change: now you could hear your favorite music without the hisses and scratches.

But with an iPod, now you can carry your entire music library around in your shirt pocket. And with the introduction of the iPod Nano, there were no longer any moving parts -- nothing to spin. Nothing moves but electrons, and they can be transferred at the speed of light to anywhere. The eight-track, audiocassette, Sony Walkman, and CDs all changed how we listen to music; the MP3 file format and the iPod transformed it.

In the '90s, we were always telling ourselves to “think outside the box.” It’s a neat image, evoking creativity and unconventional thinking as a way to arrive at ingenious new paths and solutions. But it’s a slogan whose time has come and gone. Here’s the problem with "thinking outside the box:" we all know that no matter how creative we get during the weekend seminar, come Monday morning we’re going to have to crawl back into the box again and deal with our current reality.

The problem isn’t that we need new ways to simply step outside the box -- we need to completely transform the box itself.

In fact, whatever your box is -- your job, company, career, situation -- it is going to transform whether you like it or not. There is no field or profession, no business or organization, that is not going to transform dramatically and fundamentally over the years ahead.

In fact, we’re standing on the foothills of an enormous mountain of change -- only most people can’t see it. From most people’s vantage point, it’s easy to assume that the biggest changes have already happened: the Internet has already turned the world upside-down and changed everything. But that’s hindsight, not foresight. The proliferation of the Internet throughout the last decade is nothing but prologue, not the unfolding story itself. It was not the transformation it was only the foundation that laid the groundwork for the transformations to follow; the overwhelming majority of which are still ahead of us.

We are at the dawn of an era of technology-driven transformation that will make the changes we have experienced over the past 25 years seem tame, mild, and slow. We have crossed the threshold into a time of transformation. And that is the context of this flash foresight trigger: expect radical transformation.

In the past, it was important to change. Now it’s no longer enough to change. In fact, as I tell my clients, to change is to fail. We need to transform.


Our intelligent future

Product intelligence is perhaps the most vivid example of seeing how dramatically technology is going to transform everything in the years to come. The cost of intelligence is falling fast; even faster than the cost of energy is rising. What’s more, it will continue falling for years to come. Can we really say this with certainty? Yes, because it’s a hard trend. It is a direct result of the increase in processing power, storage, and bandwidth, three digital accelerators that are now pushing us forward faster. (To read more on hard trends go to Dan's article defining the subject, Special Report - Seeing the Invisible and Doing the Impossible.)

At the same time, while the cost of intelligence continues to fall, the intelligence of intelligence (that is, the increasing sophistication and capabilities of embedded product intelligence) continues to rise in a classic hockey-stick arc that is approaching vertical. What we think of today as “smart concrete” will be at the dumb end of the scale ten years from now and the smart end of the scale will be staggering compared to what’s possible today.

In the future, we’ll bring intelligence to everything that uses any kind of energy. Smart houses that know your habits and schedules as well as the changing cost of electricity in real time, minute by minute. Your house will know exactly how to adjust your climate, lighting, and other power-consuming features in the most economical and optimal-performance ways. Smart cars that know when to use which fuel, according to the terrain, locale, and type of driving you’re doing. Intelligence will drive our multi-fuel future, so that our tools know when to use different fuels and how to use them for optimum efficiency and productivity.

These are just brief examples of how product intelligence will transform our world. From energy to agriculture to healthcare, our world will be transformed as the curve of digital technology’s advancement goes vertical. We could choose any one of a thousand other areas, since this metamorphic wave will leave nothing untouched. But no discussion of the coming transformation would be complete without a tour of the environment in which we have come to spend more and more of our time: The Internet.


Welcome to Web 3.0

To date, the world wide web has gone through two basic iterations: The first generation, lasting through the end of the nineties, presented the Web as a flat, one-dimensional way of displaying information that could be accessed by keyword searches. Basically, it was humans interacting with computers. This would soon change.

The Web’s second iteration, Web 2.0, has been characterized by the user-to-user dimension of content sharing. Peer-to-peer (P2P) networking was the application used by Napster to offer music file sharing to the masses. Since then we have seen enthusiastic amateurs from around the world work together to classify and post massive amounts of new content on the collective encyclopedia project Wikipedia.

Idea-sharing tools (blogs and Twitter), personality-sharing sites (MySpace and FaceBook), photo-sharing sites (Flickr), and video-sharing sites (YouTube) are all examples of the content-sharing nature of Web 2.0, which has given rise to the concept of social networking.

Thanks to the underlying technology of XML, which allows machines to talk to other machines over the Web, applications as well as individuals can also share data with each other. For example, the connecting of corporate or personal location-based data to Google Maps.

Web 2.0 created an entirely new experience from Web 1.0 but that’s all behind us now. Web 2.0 is already old news.

The future is Web 3.0.

The hallmark of Web 3.0 is that it is an immersive environment. In this new Internet construct, you won’t use the Web, you will enter the Web. Where the essence of the early Internet experience was information search and retrieval, and Web 2.0 was all about interaction and communication, the prime thrust of Web 3.0 will be immersion and multidimensional experience.

Today, we talk about going onto the Web to look for information. In the future that language will change. Instead, we will speak about going into the Web to learn and interact.

Since 2000, I have been giving small demonstrations of an early prototype 3D Web browser in my keynote talks, showing audiences what it would be like to step into an inner-spatial, immersive environment to shop and get customer service.

As you click on this site, you have the sensation of stepping into a room where you are surrounded by content of different types on all sides. Turn to the right, and there on the wall is your live newsroom -- CNN, USA Today, The New York Times, The Wall Street Journal, NPR, BBC, whatever your favorite news sites and sources are, there they are, all open simultaneously. Now look to your left, and there are the most current projects you’re working on. Look behind you: itineraries for your next trip, your banking and investment information, whatever information you like to have nearby.

The applications of such an experience will be transformational, not only in and of themselves, but also as combined with their real-world counterparts.

Right now, let’s say you and I attend a big trade show on the latest technologies for your industry, whatever it may be. All the biggest suppliers from around the world are there, showing off their latest, greatest new stuff. Even though we’re there for several days, dawn to dusk, there’s no way we can get to all those booths and see all those displays. I’ve been to trade shows that feature entire city blocks’ worth of the latest technologies. How do you take it all in? It’s impossible. So let’s make it possible.

When the conference is over, everyone packs up and goes home. What if instead, we just cloned the entire event to 3D virtual? The CAD (computer-aided design) drawings of the building already on file can instantly recreate the entire conference center in 3D form, needing only graphic artists to get the colors right, let the vendors add their virtual products, and "Presto!" you have your fully immersive trade show.

Now, when we go home, everything is still there: It’s never over! You can click on any and every booth and connect to a real salesperson via video conferencing anytime you like. And by the way, the vendors are still paying a fee, albeit a fraction of the in-person cost. Now, instead of having a three-day conference, you have a twelve-month conference.

Because of runaway multiplication of the three digital accelerators -- processing power, bandwidth, and storage -- over the next several years we will see this kind of dimensional experience come to the Web for the general user.


Web 4.0: Ultraintelligent electronic agents

If Web 3.0 is the future, then what’s beyond that? Web 4.0, of course; a further iteration of the online experience that will transform how we do everything. The essence of Web 4.0 is this: instead of our having to go searching for what we want, it will come to us.

Advances in artificial intelligence have created a type of intelligent search that tailors itself to the individual user, learning our parameters and preferences to make our searches automatically more relevant and useful to each of us individually. Soon we will be using a powerful new tool to do a good deal of our Web-based work for us, thanks to an emerging technology called ultraintelligent electronic agents.

Because they reside on the Internet, you can access your e-agents from anywhere, regardless of where you are or what device you are using. Only you will have access to your personal e-agent. You will use two forms of biometric identification, like your voice and face, or your voice and fingerprint, to identify yourself.

You will be able to select various types of plug-in agent functionality. For example, your financial planner may offer an agent plug-in module to help you manage your money. Your travel agent, if you still have one, might offer a plug-in giving you highly customized and unique travel advice. Your trainer from the gym might offer a virtual trainer plug-in to be with you on the road. The list of possible plug-ins is endless.

You will most likely have one main e-agent you interface with most often, but you will have others that help you both at home and at work. Organizational e-agents will execute tasks on behalf of a business process. Personal e-agents will carry out tasks on behalf of one user. In time, businesses and individuals will delegate basic responsibilities to a customized collection of highly intelligent e-agents.

Your e-agent will use neural network technology to learn more about you every time you use it. This is the function, for example, that allows Amazon to build a profile of your preferences by keeping track of your searches and purchases, and how it is able to make personally relevant recommendations. The more time you spend on Amazon, the better it gets to know you and the better its recommendations become.

Your ultraintelligent e-agents will take this functionality to a whole new level. Imagine sitting down in front of your television, turning it on and, since it is connected to the Web, your e-agent pops up and asks what you are in the mood to watch. Let’s say you want an adventure movie that you have never seen before. The e-agent will suggest a particular movie (set in the future because your past adventure movie selections were also set in the future). If possible, it will suggest a movie that has your favorite actors and director, and a plot that has twists and turns the way you like it best. Or, if you want something fresh and different, a complete change from your usual choices, then your e-agent can fill that bill just as easily.

For many, the e-agent will become a friend, listening to and helping to solve minor problems, responding sympathetically, and suggesting helpful resources. They will be great “listeners” and will respond only when a response is needed and with the kind of response you have found most helpful over time.

Think of your e-agent as a personal concierge desk. Wherever you might benefit from a human agent, mentor, or coach, you will begin to find electronic versions that will serve as virtual assistants of those human advisors, helping you stay on track. And since the Web will go with you wirelessly wherever you go, your e-agent will always be there when you want or need help.

Sometimes when I talk about such developments, people say, “That sounds terrible; a world where everyone interacts with machines and artificial intelligence, and nobody talks to each other anymore?”

But in fact, it’s quite the opposite. As we transform into a vastly more high-tech society, we will see our world become more human, not less. There is a simple reason for this, and it goes to a crucial flash foresight principle that governs how all this digital transformation will actually play out in the real world: the both/and principle.


Think both/and

In the late eighties, many futurists predicted that by the late nineties, our offices would be paperless. We’re still waiting. When the late nineties arrived, experts started predicting that within years, we would have no more shopping malls. The malls are still with us.

Executives, managers, and the business and popular press all tend to make the same false assumption about the future of technological change. Every time a new product category is introduced, they assume that the older category will soon vanish.

But that’s not the way it works.

The hottest new breakthrough technologies do not necessarily replace older ones. Instead they often coexist with them, side by side. Why? Because the old technology has its own unique profile of functional strengths, which the new technology never fully replaces. In the case of paper, it’s inexpensive, portable, foldable, you can erase on it. Best of all, it doesn’t disappear if the computer goes down. Digital obviously has its powerful strengths, as well. Both are here to stay.

We tend to greet innovation with an either/or assumption, but this is not an either/or world but a both/and world; a world of paper and paperless, online and in-person, digital and analog, old media and new media.

Either/or thinking assumes a zero-sum game, in which the pie is of fixed size and emerging technologies, and/or emerging markets, must necessarily threaten the existence of the old. But that’s not the reality.

This is not to say that volume and market share for the older technology will always remain unchanged. Obviously there will be additional slices taken out of the pie, some smaller, some larger. But the both/and integration of new-tech and old-tech combinations has an amazing way of enlarging the pie itself. Grasping the secret of both/and integration can unleash dramatic new levels of resources, capacities, wealth, and capabilities.

Returning to our discussion of Web 4.0 and the world of ultra-intelligent e-agents, the both/and principle tells us that no matter how sophisticated and useful e-agents become, they will never replace live interaction with another person. Those businesses that most skillfully integrate electronic agents with real-time live help will be the ones that ultimately thrive and dominate their markets.

Actually, you have probably already seen this play out on a simpler platform: the infamous touch-tone “help” menu: “To review your account, press 1; to change or update your account, press 2 …” We have all at some point had the infuriating experience of trying to get something fairly simple done over the phone, only to find ourselves in a seemingly endless loop of menu choices, none of which quite get us where we want to go.

The companies who learned to adapt this new technology and integrate it seamlessly with exceptionally good live-operator customer service, and make that choice easily and transparently available at any time during the experience, are the ones who excel, survive, and thrive.

The future is not automated help; it is automated help and live help. The future is not digital, fiber optic, automated, self-serve, and youth-focused. It’s digital and analog, fiber optic and copper, automated and manual, self-serve and full-serve, youth and elders.

The faster things change, the more we will live in a both/and world, and one flash foresight key to surviving, succeeding, and thriving in that world is to continually seek ways to integrate the freshly old with the emerging new.


The new Golden Rule of business

The old Golden Rule in business was to find out what your customers wanted, and give it to them. “Do unto others as they want to be done to.” Today, if you ask your customers what they want and you give it to them, you’re missing a huge opportunity, because their answers will never give you more than a fraction of your potential.

Our capabilities are changing far too rapidly for this old rule to be useful. Customers today don’t know what they want, because the things they most want are things they don’t yet know are possible. Customers did not know they wanted an iPod, iPhone or iPad until Apple gave it to them.

Therefore, the new Golden Rule in business is this: Give your customers the ability to do what they can’t currently do but would want to if they only knew it was possible.

To survive and thrive, look into your customers’ visible future, look at their hard trends, at what you’re certain about regarding their future. See what problems they are going to have and solve them before they happen, so that by the time they’re just starting to experience the problem, you already have the solution.

And if you don’t?

Then it’s over, because this technology-driven transformation will not wait, pause, or stand aside while you think about it. There are two critical truths about business in this new era that you cannot afford to ignore; we might call them corollaries to the Golden Rule:

If it can be done, it will be done. If you don’t do it, someone else will.

This is going to happen in every field. Blockbuster didn’t move fast enough to make the home video rental business virtual so Netflix did. In the 2008 presidential election, the Hillary Clinton and John McCain campaigns didn’t grasp the potential of online fund-raising and Web-based voter interaction: Barack Obama’s people did. In 1999, Yahoo was the king of search, but if you worked for Yahoo in their search division back then, you were in the basement because the company itself didn’t see the value in search. Google did.

No matter what your business or occupation, transformation is coming. And the only way to survive it is to expect it … and transform.

Daniel Burrus is considered one of the world’s leading technology forecasters and business strategists, and is the founder and CEO of Burrus Research, a research and consulting firm that monitors global advancements in technology driven trends to help clients better understand how technological, social and business forces are converging to create enormous, untapped opportunities. He is the author of six books, including The New York Times and The Wall Street Journal best seller Flash Foresight: How To See the Invisible and Do the Impossible as well as the highly acclaimed Technotrends.