3 macro trends for our digital future

When I think about the future and try to imagine what will happen, we like to use big macro trends – how they come together which then creates a framework to identify the most interesting opportunities and how to invest in them. It is not about technologies, but about trends. How these trends influence society, what’s happening to people and how people then behave.

3 macro trends 

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1.       Transition from bureaucratic hierarchies to technology-driven networks 

Bureaucratic hierarchies shape the world we have been living in for the past century – the way governments, businesses, markets are shaped and even the military forces are organised. Most of these structures have 1 or a few at the top controlling everything, and a funnel typically a pyramid where you have the people out in the field. The information which is gathered and learned from the field is fed to the top where the decision is made and then funnelled back down to the base of the pyramid. This was the dominant way the world had run because transaction and communication costs were so high in the Industrial Age; this was the most efficient way to get things done.

Of course digital has changed all of this – we are now in the Information Age and we’re seeing technology-driven networks replace these bureaucratic systems. The first place we saw this was in the Media Entertainment industry (Radio, Newspapers, TV) where they were the first industry to feel networks replacing bureaucratic hierarchies.

For example, Twitter replaced the Newspaper – where the hierarchy from reporter to editor is eliminated to get news published. The crowd determines its newsworthiness, where the most credible and most interesting (favourite) content is surfaced instantly on our newsfeeds. We are connected to each other and this is why we are able to facilitate this change. Another example is YouTube, where once video production was done in a hierarchical manner with lots of decision making; now we are our own video creators, we publish and the crowd determines what is important to watch and spread.

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 2.       Moving from mass to speciality: Everything will be unbundled

This refers to how products and services are packaged and taken to market, not how companies are organised. Technology has made it more efficient for companies to unbundle their products and services. As a result, companies are offering more specialised, tailored services where consumers can buy ala-carte. The newspaper is a perfect example of this – we used to buy the whole newspaper, 1 title and read cover to cover. However, we are now able to pick and choose from multiple titles and its content, from different vendors. Consumers are embracing this because they understand that they go to specific vendors because they are the best in what they do.

However, there are many other industries that are being affected by unbundling. For example in Banking, we are seeing a shift where instead of a one-stop shop where we used to apply our loans, mortgages, insurance policies as well as our everyday banking needs,  we are now seeing entrepreneurs such as Lending Club and Funding Circle enter this circuit by offering peer-to-peer lending networks and small business lending platforms. As a consequence, these entrepreneurs are taking away highly profitable lending franchises away from the banks delivered through the technology network model.

The Education sector is also going through significant changes.  Where education was once delivered in institutions, now people have the opportunity to consider other methods of learning, particularly e-learning. For example, Coursera offers live-streaming content and online classes by some of the top universities and organisations.

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3.      Constant living in the “Now” with the Smartphone 

Contrary to belief, there are many parts of the world in particularly the Developing World where this choice has been made. They have leapfrogged the desktop/laptop phase because they were not able to afford before, but they are now able to obtain this comparable, relatively cheap smartphone instead. This means that we are all connected, all of the time.

Some companies (start-ups usually) are taking full advantage of this. Using a combination of SoLoMo drivers, companies are now offering products and services that change the world we live in. For example, Uber and Hailo  have potentially changed the world of transportation where routes are maximised while downtime minimised. It’s all because we are nodes in the network and our ability to be tracked (through our phones) and to track others (in this case the taxi).

Another example is the delivery service. The fact that Ocado sends me a text message saying in 3 hours’ time my groceries is delivered in a lemon van, registration number so and so with the driver’s name and I have no substitutions or missing items is proof to me that people at Ocado know their shit.

Additionally, the Dating services such as Tinder and Grindr for the LGBT community are embracing digital technology where they leverage Photos, Location and Social Media integration – essential capabilities of our smartphones.

All of this is changing the urban logistics fabric. Today it is on-demand cars, “on-demand” date partners, soon maybe flowers or ice cream delivery in 5 minutes.


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