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Insights from Strat Fest 2017: What's Next?

After an extended period of socio-political upsets, civil and economic upheaval the topic of “What’s Next?” was very relevant for this year’s Strat Fest. Following from last years “Leadership in uncertain times”, and in a world that has continued to buck trends and throw up surprises, we once again gathered together a leading panel of speakers to discuss the future of business, politics and technology.  

Here is a round-up of the topics and highlights covered by our panel to the various eager ears of 100 plus senior strategy professionals and business owners…

Daniel Franklin - Executive Editor of the Economist and Editor of “The world in . . .”

Daniel has been at The Economist since 2006 and has been the Executive Editor since 2003. He is also the Editor of their annual publication ‘The World in…’ which focuses on the year ahead and has published two books on Megatrends.

This Strat Fest we were lucky enough to get a sneak peek into ‘Daniel’s Dozen’ for 2018, covering 12 trends and predictions for the year ahead, from space travel, to literature, to economics and politics.

1) Trumpism vs. Macronism

I.e. closed protectionist. Vs. open reformist / pan-European. Although Trump and Brexit were extraordinary in terms of political upset, the particular background and rise of Macron was arguably on a whole different level of shock and political upset. The interplay between these two juxtaposed ideologies and movements will be key in the coming year’s political landscape.

2) The US mid-terms.

This will be judgement day for congress and senate – Democrat control of the house will b incredibly important.

3) Big elections in Latin America twinned with the end of the ‘Castro’ era.

A lot is going to change as the longer South American election cycles come through. The Mexicans could end up with very different government to the one north of their border; the Brazilian scandals of recent years will have some resolution. The Colombian and Venezuelan elections should also occur amidst growing unrest and the regime end in Cuba could spell massive change.

4) The World cup in Russia and the presidential elections

With eyes on Russia, is there an uncontrollable element for Putin? He might be able to lock up his opposition, but can he control what happens in the stadiums during games? This is also twinned with the fact that America is not present for the first time in a long time, but the diminutive Iceland becomes the smallest nation to reach the cup; all in all- a strange cocktail for a politically charged sporting occasion!

5) Winter Olympics in South Korea

Another sporting ‘eyes on’ moment and a huge deal for the South Koreans with a vast amount of investment, a chance to show a different side than the one presented by the media, but will the world visit a potential nuclear warzone caught in the crosshairs of conflict?

6) COP24 in Poland

The supposed follow on from the Paris agreement now has massive implications with Trump removing America from the party.  It is a particularly important time for environmental change and world leaders to take a stance.

7) New finance rules for Europe (MiFID II, PSD2)

A slightly less exciting prediction, but with far reaching effects is the introduction of new financial legislation. The interplay between tightening restrictions in Europe compared to loosening in the US will have wide reaching implications on the financial world and no one really understands how this will play out in the long term.

8) SpaceX to the moon

SpaceX will fly its first space tourists around the moon, and hopefully back again! It is a momentous occasion for the human race and a precursor of things to come.

9) 5G trials

In the world of tech - 5G trials will start, AI in everything, the rise of commercial drones, and the subsequent ‘tech-lash’ and regulation around all of these as well as the issues with data theft, silicon valley tax etc.

10) A year of ‘biggest ever’

Including the biggest ever free floating facility, biggest ever hotel, and an attempt on the land speed record.

11) A year of anniversaries

Marx 200th anniversary, 15 years of LinkedIn, 10 years since Lehman crash, 100th year since armistice day, Tata 150 years, Hertz 100 years, and The Economist itself is 175 years old.

12) Mary Poppins returns

Daniels last prediction – although he wouldn’t sing us the song – was the return of Mary Poppins in the film with Emilie Blunt and this also being linked to centenary of the suffragette.

So although he didn’t know for sure what the big issues and events of 2018 might be he did promise us at the end of his speech that 2018 would be Supercalifragilisticexpialidocious!

Watch Daniel’s talk here

Dr. Pippa Malmgren – Author, former advisor to the White House and Co-Founder of H Robotics.

After joining us last year to talk through signals and leadership through predictions [read the highlights here], Pippa returned to the StratFest panel to give us her insights into the role that AI and technology will play on business in the coming years.  

“You can have all of the PHD’s in the world, but can you weld metal?”

She started by outlining that, although everything is becoming more and more digital, the importance of ‘real skills’ in today’s working environment remains very important. In her own case at H-Robotics, which makes non-weaponised drones, you can hire individuals with all of the PhD’s in the world, but without twinning complex engineering technical skills with real world practical skills such as welding, things will never get – in her instance quite literally – off the ground. It is this combination skill set that builds quicker and tries these things more pragmatically that will enable people and businesses to edge ahead in the world of tomorrow. 

In the case of technology though, drones and miniature sensors are just a couple advancements that will affect our lives in future. The application of conventional drones, for instance, will become more mainstream and will be much more intelligent than to just deliver packages or groceries. A few changes include:

  • Insurance. A drone can be in the air much quicker and give a much more detailed picture than a conventional helicopter. Weather insurers will be able to create a 3D image of damage quickly and in a cost effective manner and then address accordingly.
  • Mining and Oil & Gas. Similarly here, drones can do in minutes and to much higher levels of accuracy and safety what currently takes humans days. A board of directors will then be able to walk through the 3D image of an accident or situation and advise accordingly.
  • The Police. Again, drones can be used to take a full 3D blueprint of a crime scene and take it back to the lab for analysis.

Beyond these drone specific tech issues, there is also an increasing world of mini sensors in everything we do, for both the good and the disconcerting. The leaps forward the Chinese have taken in a social credit system - where your behaviour is so closely monitored that it could affect the cost of your mortgage or your ability to get a job in government. The fact that movies and television will start watching you and advertise accordingly is now a not so distant dream!

Pippa ended on the fact that, although there are positive and negative connotations to this rise in tech, it is the adaptability, creative mind-set and analytical skills that are going to be important to train. Not many people need to understand Quantum mechanics, but you do need how to approach a problem and create a solution. It is this critical thinking that will become ever more important as tech takes these massive leaps and bounds.

Watch Pippa’s talk here

 

Paul Wilmott – Senior Partner at McKinsey and Founder / Leader of Digital McKinsey

Paul is the founder and global leader of Digital McKinsey, which works with executive teams to improve business performance using digital technology. He recently co-led a global team researching 'The Future of Work' that projected the impact of automation on global labour markets and it was this topic which he talked us through at Strat Fest.

To start looking at the future, Paul first took us back to look at the invention of the steam engine, and the construction of the very first computer, built by Tommy Flowers. Agriculture and the manufacturing based workforce plummeted when steam engines took over in the fields and factories. Similarly, computing power exploded onto the scene and reinvented how people worked at the end of WWII.  Now, with the rise of AI more powerful than the human brain, we are seeing another similarly seismic wave of change in the workplace.

So are robots going to take over our jobs? 

Well apparently Paul got McKinsey to ask this very question. They analysed over 1,000 job categories and estimated the extent that automotive and AI processes might improve upon / replace. On an interesting side note, they gave the same task to AI as they did to their own analysts and the AI came back with more accurate results – so apparently no one is safe not even top tier strategy consultants!

Their analysis showed that, yes, in fact some areas were ripe for automation especially around food and catering services. But irrespective of sector and particular job category, the same thing remained true – that humanity seems to have an inbuilt reticence meaning that our “adoption curve” will take decades to catch up with the technical ability.

There is an uncertainty on timing; TV took over two decades, Facebook took roughly a year and Pokémon Go took roughly 6 hours to become imbedded. There are a raft of economic and social supply & demand issues that stop things from being clear cut, but we will most likely be comfortably into 2060 before today’s achievable tech has become fully mainstream in a cohesive, overarching manner.

“The only way to achieve economic growth is by productivity growth.”

On the macroeconomic scale, he pointed out that labour growth is essentially dead in developed markets, but productivity growth is conversely growing continuously. To maintain this growth we are going to have to deploy all of the tech we have to keep GDP at a level we are accustomed to.

So, according to Paul, these cutting-edge technologies require significant improvements in four core areas:

1) Infrastructure

2) Skills / training

3) Trade i.e. how IP is transferred

4) Incentives – firms and individuals need to be incentivised to be entrepreneurial with tech.

So what does this mean to the individual? How do we become leaders in a digital world? 

Paul left us then with his thoughts on this and on what we need to be doing:

  • Explore – look beyond our echo chambers to find new things
  • Learn – Not just the code, but the physical and problem-solving skills
  • Dream – think bigger & think more
  • Challenge – ask why and continuously challenge the status quo

“We all need to dream more in this world of immense possibility”

So, there is a lot of change coming in the world of work and yes tech will take the driving seat; but Paul believes the key for us to survive in this world will be the ability to adopt change at pace.

Watch Paul’s talk here

 

Sir John Grant – Former UK Representative to the European Union

Sir John Grant was UK Ambassador to the European Union until 2007and now specialises in advising businesses on government relations, communications and political risk. He came as an interesting balancing perspective and his opening gambit made it quite clear that the key thing about Brexit is to avoid, where possible, talking about Brexit!

“80% of our energy is wasted on Brexit.”

As such, he focussed more on the underlying issues in government and politics in general of which Brexit is but a symptom. A first point was that the basic problem in British politics is that the connection between the vast bulk of political energy and what we actually need to do in politics has become incredibly tenuous. To refer to earlier points around big data, AI etc. he pointed out that no one really knows how governance of all this should be carried out and no one’s doing a great deal about it. We will be defined by how the government manages our social services, affordable housing, the NHS, Infrastructure projects and the list goes on, but we are all focused on Brexit; 80% of our attention should not be spent on it and its’ subsequent admin.

What should we be looking for in politics?

Firstly, what we need is political leadership in a very literal sense– the verdict is out on France and it seems as always that people that lead eventually get in trouble- demonstrated by the recent German election. But it is clear people are looking for effective leaders even if this can come in all shapes and forms!

The future is complicated – we need to find people who can tell us what is going on. Populations and electorates haven’t seen any growth in any direction. They are massively disenfranchised and as a result of this, unpredictability sneaks in and things new ideas and situations appear and they are usually considered bad. As such, the world is not seeing a great deal of positive action from its governments. Governments can’t predict and can’t work for everyone they govern, which leads to further polarisation.

Politics of identity is riding the social media and tech wave, when Clinton said 25 years ago that “it’s the economy, stupid” it was true, but not anymore – take Catalonia, economically nonsensical, but still very real despite this.

Tribalism and autocracy are coming back in a big way and this is disconnecting us from our own futures, sometimes incredibly actively and at times violently spitting in the face of said future.

"It’s not all data. Enjoy poetry, read books and think creatively.”

This is creating a very interesting challenge for us today in the business world and especially the strategic forward-thinking world. How can you run a successful long-term business when governments can’t regulate and give comfort of support and precedence? If your legitimacy and right to operate can be called into question incredibly quickly how can you progress? As such can we really rely on governments to run the world anymore?

Watch Sir John’s talk here

In Summary

Overall, it was a very thought-provoking panel with some interesting points to be made and a tour de force of what we can expect in politics, technology and business. Not only will 2018 be supercalifragilisticexpialidocious, but we will most likely face a series of events that are not expected that will require us to re-evaluate and, no doubt, create ever more questions. We look forward to covering these in Strat Fest 2018!

This session was followed by a fascinating and powerful Q&A session, but this post is already too long and each question was a worthy topic in its’ own right. As a result look out for more in the Strat Fest series coming soon.

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