1050x300 agd tech

AGD 2016 in Brief: Transformation Through Technology and Innovation 

Author(s): Asia Global Institute

Date: Aug 18, 2016

Theme(s): Finance & Macroeconomics

Publications: Project Documents

Suntory Holdings President and Chief Executive Officer Takeshi Niinami, Ayala Corporation Chairman and CEO Jaime Augusto Zobel de Ayala II, and McKinsey’s Richard Dobbs discuss the impact of technology on human society and how this has changed and evolved as a result. This discussion was moderated by Napoleon Biggs.

Humans are adapting to technology as quickly as it develops.

That technology is a disruptor is nothing new; it has been that way for hundreds of years. But what we are seeing is the acceleration of technological shifts. We saw 500 years between the development of the first printing press and the first computer printer and just 30 years between the first computer printer and the first 3D printer. We saw 5,000 years between the development of the horse and the cart and the car, and just130 years between the car and the self-driving car.

We are also seeing a rapid acceleration in the way technology has both evolved and adopted. It took 75 years before 100 million people took to the telephone; 38 years for the same number to adopt the radio and 13 years for the same number to take up the TV. Facebook needed a year to reach 15 million people; and Angry Birds 4 just 35 days to reach that 15 million audience number.

Key areas of society are unable to keep up with the rapid change in demand created by technology.

The education system is going through a massive disruption. Some countries have experienced the benefits of a boom which has, in turn, benefitted the private sector economy, but which has also left the public sector, and its educational system, struggling to meet demand. As a result, people whose educational attainment don’t match the needs of the existing job market, are getting left behind. countries like the

When secondary school graduates leave school and enter jobs in areas like the business processing centers, they are actually not ready. These fresh graduates need at least half a years’ training and providing this is not just a good business idea it it also helps with the country’s development. The idea is to hijack the last year of high school/secondary school and, with the support of education officials, get the students to prepare to enter the workforce rather than following the traditional curriculum. This way, their levels of engagement and ability to work improve exponentially.

Another hurdle is regulatory. The capacity for people to adjust is the key; and while the private sector is malleable and can adjust quickly, the public sector needs more time to adjust as they have less incentive to change and adapt, so it tends to be a little bit rigid and formal. As a result, the entire regulatory structure moves and reacts more slowly. Whether or not a company goes global, there is going to be tension between private sector initiatives and public sector who is trying to catch up on regulatory updates.

There are great business opportunities for the private sector to engage in the educational space. Businesses should keep their peripheral vision open to discover opportunities in other industries: “What might we learn from the other industries that is of interest to our group?”

Artificial Intelligence can’t do everything

There is only a slight risk that artificial intelligence (AI) threatens will threaten human life in the way that it does in the movies, but it will pose a big risk to jobs. It is a fact that jobs will be replaced faster than the pace needed to retrain people and create new positions.

About 30 to 40 per cent of activities will be replaced by machines in the next 10 to15 years, and during that time, we will see workers being replaced by AI. We are going to see a growing underclass.

One example of this is the impact created by the rise of a self-driving car. About 2.5 million people in the US drive for living. They drive trucks, buses, and taxis. Most of these drivers left the educational system when they were in high school, and they are the ones that are threatened by this new technology.

Most people with college educations are most likely to have or find jobs that are suitable for them, but those who have left high school could lose their jobs to machines. And while technology opens up huge opportunities such as 24-hour services the downside is that jobs for unskilled labor are going to disappear.

Further, while technology is increasing productivity it cannot make moral decisions on a human’s behalf. Humans still need to see through human eyes. With regard to ethical issues, AI are unable to judge and humans ultimately have to make the decisions.

The issue of data and data security remains controversial.

While more executives see the opportunities brought about by the use of data, many corporate boards around the world are in the dark about data security. There are many cases where companies get hacked by governments, quasi-government intelligence, and sometimes non-intelligence groups. Data security is not very advanced in areas like the healthcare space, but this is not true of the financial industry space.

In order to access data and get analytics, networks are increasingly becoming more sophisticated. But if anything goes wrong with this network, we cannot do any of the things we are doing now, yet we cannot live without those connected networks. There are concerns that that the pace of development is moving fast and the connection is moving quickly, so what happens when the systems fail? Hacking incidents are serious but for now, they are on individual level, and affecting individual corporates. What happens when control over the entire system breaks down?

While these concerns shouldn’t hold people back from innovating, we also need to consider data protection and security at a different level.