In my previous column, I outlined how I think about organizing the research we do for clients — aimed at seeing past the obvious trends to detect the “weak signals” that indicate that something unexpected might be going on. Here’s what I am watching for in 2017 and beyond.
Everything (except people) is getting smarter. The embedding of processing and connectivity into everyday objects continues relentlessly (internet-connected toaster or hairbrush — both shown at the Consumer Electronics Show last week — anyone?). Often poorly understood, the Internet of things is steadily morphing from the peak of the hype cycle towards being both a real opportunity (convenience, productivity, health, safety) and a major problem (poor security, uncertain reliability, vastly expanded vulnerabilities).
What I am watching is the evolution of the unconscious tradeoffs that consumers (and businesses) are making as they “suspend” various aspects of life to the convenience of hardware and (increasingly) software surrogates. We have been trained for decades to watch three-dimensional action in two dimensions — to such extent that 3D TVs and many 3D movies do less well than their 2D versions. We can suspend “disbelief” for the convenience of not having to be there in person and to enable us to enjoy “entertainment’ that could never actually happen or that we would never choose to be a part of.
Which leads to our second watchpoint: The application of artificial intelligence to augment everyday activities both at home and at work. This is a “suspension of agency,” or of direct volitional action, as we increasingly rely on monitoring systems (think Amazon Alexa or Google Home) and software proxies to detect what we need next and perform or trigger actions on our behalf.
This trend is subversive in the sense that it uses increasingly convenient human communication skills (voice, vision, gesture) and natural language understanding to (for now) augment and (eventually) automate increasingly sophisticated tasks. As far as the AI embedded in this augmentation has come in the past few years, it’s still a lot less than perfect — unless you’re much more careful in using it than evidence suggests even tech-savvy early adopters are being.
That is having some interesting effects on business decision making — which is evolving from “show me the data” via business intelligence and data analytics to “tell me what to do next” without needing to understand how all that data led to the recommendation for action. It’s too early to tell how reliable such advisory systems are, but definitely an area to watch.
The third area to watch revolves around the worsening state of consumer (and business) cybersecurity. As low cost, poorly secured devices proliferate, the “attack surface” available to cyber criminals of all kinds continues to grow. I’m particularly concerned about two areas — one technical, one behavioral. Technically, the rise of disruptive denial-of-service attacks of increasing scale, sophistication, and impact threatens our ability to operate in an “on demand” online world. When we’re acting directly online, we might tolerate occasional inconvenience, but as we suspend agency we’re less directly connected to what’s going on — and may become less willing to trust that what we need will get done as and when we need it.
The behavioral problem may be even tougher. The unconscious suspension of privacy and agency means that most consumers don’t fully understand the risks they run when online. Yet many consumers are also someone’s employee and all too often they take the same poor cyber habits to work with them. The result? An explosion of effective compromises through sophisticated “phishing” attacks. Changing consumer habits is hard — but it is also possible if you can get the right combination of simplicity, ease of use, attractive design, engagement, and price into the solution. Just look at the adoption of smart phones and social media over the past decade.
Cybersecurity has always been an arms race, with the advantage often going to the attacker, who generally has the same skills, tools, and funding as the defender, while not having to follow any rules. Recent history has made the situation worse: exploit kits and attack-for-hire services are now common and require very little in the way of skill or investment. Throw in the thought that no one is openly discussing — applying AI to offense as well as defense – and you can envision some very unpleasant scenarios. I’m watching for signs this is happening, initially at the nation-state level, but inevitably “leaking” into cybercrime.
Finally, I’m watch the continuing evolution of mobility and the data trails associated with identifying and tracking “place” and “motion.” We’ve barely started on this as a society and here again there’s potential for both opportunity and abuse. As we shift to on-demand convenience services (think Uber or Lyft) our consumption patterns can be used for both optimization (needing less capacity to serve more customers) and surveillance (if your “place” is always known, there’s nowhere to hide). Even absence or invisibility potentially becomes an issue — why did you disappear from the grid for an hour? There are lots of implications for policy and process here — and again opportunities to turn consumers away if we get the policies wrong.
I’ll probably keep an eye on a couple of other areas — blockchain and smart contracts for example, but those are my top five watchpoint programs. What are you looking for in 2017?
John Parkinson is an affiliate partner at Waterstone Management Group in Chicago and a regular CFO columnist. He has been a global business and technology executive and a strategist for more than 35 years.