key: cord-0060690-nerc3u6v authors: Wolfe, Jennifer C. title: Disruption and Digital Trends for the Next Decade date: 2020-08-30 journal: Disruption in the Boardroom DOI: 10.1007/978-1-4842-6159-0_3 sha: 0e8b0ad790823368f33ebdd71441d15cbb229455 doc_id: 60690 cord_uid: nerc3u6v In this chapter, we’ll talk about discipline for continuous learning. Invest the time, money, and resources to read, go to conferences, ask questions even if you fear you may be discovered for not understanding the subject, and learn about new technologies, new generations of thinking, and what’s actually working or not working in your organization. In this chapter, we'll talk about discipline for continuous learning. Invest the time, money, and resources to read, go to conferences, ask questions even if you fear you may be discovered for not understanding the subject, and learn about new technologies, new generations of thinking, and what's actually working or not working in your organization. To be prepared for the disruption coming in the boardroom, we all need to invest in continuous learning. Most board directors were previously a CFO, CEO, or a President of a similarly sized organization to the company on which they serve. Most have been out of active operational roles for 5-10 years. There's nothing inherently wrong with this model; these individuals have experience and wisdom to offer sage counsel to the company. But it also means that when they were in operating roles, they weren't dealing with many of these disruptive issues. Without continuous learning and exposure to multiple points of view about future trends, there is no way for a director to understand the new technology, new vulnerabilities, or how these trends could disrupt your business. You have to start with a basic understanding of the technology and be open to challenging your assumptions about business models and future behavior. In this chapter, I will focus on disruptive and technology trends for the next decade. It's important to think about not just one or two trends or one or two new technologies, but the intersection of how all of these changes will impact how we live and work as a society. Whether you build it, buy it, or license it, these technologies and trends will impact your company and how you operate it. However, you approach it, it will impact your workforce, and this is where you have to begin. I've provided here a snapshot of a few of the big disruptive trends and what I think are worth watching at a broad level. There are many different ways to frame this or organize the information. You might not agree with mine, and that's okay. Take it for what it is -a viewpoint on trends that could impact the future and a starting point for your own analysis and discussion in the boardroom. In Chapter 7, I provide a framework to discuss these issues in the boardroom and pinpoint what could impact your organization. All of these trends were shifts I was watching before the 2020 Coronavirus Pandemic. I've added commentary to how they may be stalled or amplified as a result of the shutdown of the global economy. All of the trends identified here are based upon research cited in the "References" section of the book for further reading. I also provide my trend forecasting methodology in the "Appendix" section of this chapter along with an overview of the underlying technologies referenced. Why this is a trend. We are migrating to a point where our search will fully convert from typing into a computer or a device to talking or giving verbal commands. If you're comfortable interacting with Siri or Alexa, you may already be there, but the tipping point is coming for everyone soon. Voice recognition software is getting better and better. As it connects to full functioning artificial intelligence (AI) and learns from its interactions with you, it will be able to better understand you and deliver what you want without requiring you to type anything. Likewise, AI will connect to all the things in our life: our car, our thermostat, refrigerator, perhaps the house itself, even your bed at night could become a thing connected to the Internet responding to your voice commands with sensors to help you achieve restful sleep and better health. Some important areas of artificial intelligence connected to devices to consider: • Manufacturing: AI will allow data insights to enhance safety, reduce costs, and yield better response. • Retail: AI will drive recommendations, improve inventory, and supply chain. • Health care: From shorter wait times to improved patient outcomes, AI will improve the ability to recognize symptoms and seek treatment. In the aftermath of the pandemic, it seems likely AI will be used to track how a virus spreads and where it could be going. • Financial services: AI will help data security, accounting practices, and smarter decision making about money. • Government: AI will improve speed and quality of services. • Education: Digitized textbooks will help virtual tutors assist students, and facial analysis will predict emotions to determine who's struggling or bored. • Farming: AI will help farmers better predict what's coming, what to plant, and when to water and reduce waste. • Transportation: AI could power automobiles, planes, trains, and other forms of transportation to be developed. • Other unique applications include better management of tracking endangered species, composing music, and predicting depressed individuals in a school or work environment, among many other uses across industries. All of which, of course, come with potentially bad consequences if the AI or the IOT it is connected to gets it wrong. Why this is a trend. Drone technology is well developed from military applications to personal "joy riding" around the neighborhood. Amazon is seeking to utilize drone technology for same-day delivery or reaching hard to get to rural places where a robotic drone flown remotely by an operator can drop off packages. The theory is this reduces costs by eliminating trucks and drivers to go to those remote places. It eliminates delivery vehicles on the road for same-day delivery in urban areas. While the FAA has approved drones for commercial use in some areas, there remain many questions to be answered by federal and local governments. I was recently at a hotel in Florida and someone in a room above me was flying a drone around. The drone peered into my hotel room, so I called the manager and he brought it to a stop. I was concerned about the drone peering in the room with a camera. It may have been completely innocent or perhaps not. But what will we find acceptable on a personal level? On a much more dangerous level, Gatwick Airport in London, December 2018, was brought to a halt for more than 33 hours impacting more than 140,000 passengers as someone or some group dangerously flew drones up into the air traffic path. The danger with commercial air traffic is without a doubt one of the greatest to consider in the questions about drones. • How many drones could we have flying around? • Who is licensed to fly them? • What happens to any element of privacy? • What about bad guys stealing our stuff from the drone? • What about hacking the drone to deliver packages somewhere else or crash into a car driving 70 mph on the highway? • What about turning the drone into a weapon? • What happens when a misdirected drone causes a plane crash? During the 2020 Coronavirus Pandemic, many local governments considered using drones to track groups assembling against local ordinances or to track the health of individuals. Is that a violation of our privacy rights? The debate about privacy over public health is just beginning. What I'm watching. I'm closely watching regulatory discussions of drone technology. This is really the pivotal issue. This is a Pandora's box if it is allowed to be opened. Much like social media is out there and can't be put back in the box. We have two generations of young people whose mental health has been affected by the negative impacts of social media. If drones are not carefully regulated outside of specific use cases (like military or rural applications), it could be a slippery slope to Orwellian privacy concerns. It exacerbates the concerns we already have about a few companies possessing too much information about us. I'm also looking at the positives of drone technology, aiding in law enforcement, emergency response, disaster relief, conservation efforts, health care, agriculture, and waste management. The need for drone technology is real, but efforts to curtail bad actors or just hazardous juvenile behavior are a policy struggle for the future. Continue to watch the startups that innovate and the policy makers who will make it safe. There are a number of sources that aggregate this data including the Alliance for Drone Innovation and the Drone Innovators Network at the World Economic Forum, among others. Why this is a trend. The technology for driverless cars was actually invented in the 1960s at Ohio State University. In 1969, IEEE spectrum published an article entitled "The Electronic Highway" by two engineers from Ohio State, Robert Fenton and Karl Olson. The technology has come a long way with test cars on the roads for Google, Uber, Tesla, and even the traditional automakers for many years. Google's Waymo has logged the greatest number of hours. We know the technology is here and it works, but there are still some challenges to be solved. The next decade will see much of the regulatory work and infrastructure work needed to safely allow automated vehicles merge in with traditional cars driven by humans. While many tout the benefit of reduced fatalities by computers driving cars, the emerging industry remains plagued with stories of safety drivers failing to do their job and humans killed by a car that doesn't read a sensor or isn't familiar with a situation. If you've ever driven your car in the snow where many of the auto functions are on (like lane assist that keeps your car centered in the lane, etc.), you know that sensors don't always work in bad weather. This is why the majority of the test programs are in California or Arizona where it is primarily sunny and doesn't get below freezing. And, for all that electric cars can do, across manufacturers, 40% of their range is reduced in extremely cold weather, according to AAA. There is still some technology development needed to address changes in environment at a cost that consumers can afford. The proponents of automated vehicles cite that the trucking industry could be revolutionized. But even those tests determine a human driver would still be needed in congested urban areas and that the primary benefits are on long-haul drives with primarily straight roadways. Certainly, we are headed in this direction, but opportunities exist in helping to solve the problems in the last mile. What I'm watching. I'm excited about the prospect of automated vehicles. The ability of a vehicle to take over in bumper-to-bumper traffic or on a longhaul straight shot is appealing. But, I'm more interested right now in how some key questions are answered. • What happens to all of the traditional cars? • Could the government force you to give up your car? • How much data and power will big tech have when they own the cars that drive us around? • What happens when a foreign state could take over all of our cars or you accidentally click on a phishing email connected to your car while driving? • What level of privacy will remain if one company now has access to all of this information about you or has a camera on you while you are in your own car? • How many years will it take for people to give up their cars where drivers and robots occupy the roads together? • Will this give the "have nots" more cost-effective access to transportation, or will it further divide those who can afford a driverless car vs. those who cannot? • Could it further trap the poor into using technology owned by a limited few companies where their data is their currency? • Will police vehicles be unmanned with computers making decisions? • What companies will power the artificial intelligence? • What if the goal of reducing traffic accidents doesn't change because computers make mistakes, too, or don't have all of the variables programmed in? • If local municipalities rely on a certain amount of traffic ticket violations for its budget, how will that get replaced if robots don't make mistakes? There are many questions to be answered to realize the potential of automated vehicles. In those questions are tremendous opportunities, as well as challenges. Why this is a trend. At Davos 2020, the annual World Economic Forum, climate change and reducing carbon emissions was front and center as the issue of the day for corporations and intellectual thought leaders. I realize that there are diverging views on the timing of climate change and some groups that don't believe it is occurring at all. I try not to be political in my research or advisory work with boards of directors because all viewpoints need to be heard and understood. Wherever you are in your personal beliefs on climate change, the one generally accepted business principle is that there is now a demand for companies to take steps to limit carbon emissions and find alternative energy sources. Microsoft announced at Davos 2020 that it would erase its carbon footprint with its future strategies to include a $1 billion innovation fund to develop carbon removal technology and focus on cleaning carbon from the atmosphere. Of course, just days later, they fired up diesel generators when the power went out at one of its facilities. Across industries, there will clearly continue to be a debate about how to balance cost-effective energy needs in a modern world with stewardship of our planet for future generations. What I'm watching. The Bill and Melinda Gates Foundation is continuing to investigate how to safely use alternative sources of power, including nuclear power as just such a solution. Their investment in TerraPower has focused on solving that problem but also faced setbacks. Their work to find solutions, wherever they may be, could ultimately mean that families can afford to buy efficient energy homes without relying on traditional energy sources. Air, wind, solar, biomass, geothermal, and biofuels are all also in the mix, but widespread accessibility to the average consumer is still developing. There's no question this is a polarizing and emotional topic, particularly for many Millennials and Gen Z who believe that the older generations are putting their future in jeopardy. Power and energy are a central factor to all businesses and to our very way of life. It's clearly a marketing advantage to show how you are environmentally savvy (see more in Chapter 6 about the latest environmental and social governance trends), but there is also a balancing act of practicality. How do you do what Microsoft is doing (i.e., power your company effectively while also delivering on promises for environmental stewardship)? Why this is a trend. New home sales in 2019 reached the highest numbers since 2007, and existing home sales were up nationwide in 2019 according to the National Association of Home Builders. As millennials finally begin to reach the age and stage of their life where they are getting married, making a better salary, and having kids, they are realizing they can't afford to live in urban centers. Accordingly, they are migrating out of big expensive cities and flocking to places like Boise, Idaho; Raleigh-Durham, North Carolina; Louisville, Kentucky; Salt Lake City, Utah; Memphis and Nashville, Tennessee; Houston, Texas; Detroit, Michigan; Indianapolis, Indiana; and Columbus, Ohio; to name just a few. They find new jobs and more affordable housing to begin their "adult" life. As they move, they are no longer looking for the "big home" that was a status symbol to Boomer and Gen Xers, but rather something smaller and more affordable in a nice community that gives them access to the "urban" environment they like without the price tag. Older generations are also leaving high tax states because of the change in tax laws that now limits the federal deduction of local taxes. Couple all of this with the reality that new homes will need to tap into new energy sources (California already requires new homes to have solar panels) and changing technology capabilities for enabled smart homes, and we are poised to see tremendous growth and change in the housing market in the years ahead. This leaves an inventory of many old homes that may no longer be wanted or need complete refurbishment. In the aftermath of the 2020 Coronavirus Pandemic, its likely many living in urban areas may also question if that is the best place to live in the future. As work shifts to remote work vs. in-office work as a result, the opportunity for many to leave densely populated environments may result in further expansion of new housing to meet that demand. What I'm watching. I'm closely watching how the construction industry will leverage robotics and increased automation to deliver on the demands of the future. I'm also looking to corporations that recognize the migration out of big cities and how they will create "corporate communities" to deliver affordable housing with a community-driven culture to meet the needs of Millennial and Gen Z workers. In the vein of "Levittown" of the 1960s, the idea of smaller affordable homes with a community approach will continue to expand. I'm also watching how the vacation rental regulations are changing. We could see many areas that were once resident-driven communities evolve as vacationer havens. In costly urban areas, many homeowners may opt for their place to become an investment opportunity while moving to greener pastures that are more cost-effective. We can also expect to see styles and designs of homes evolve as the need for technology integrated into the home expands. Finally, I am watching how smaller communities outside of big urban centers create land trusts or opportunity zones to attract investors -this could give real estate investors new incentives as well as build communities in smaller markets looking to grow. Why this is a trend. Speed is the contingency for the new world order. Every trend identified here in this chapter requires fast Internet access. For an entire population to be living their life connected to things and devices powered by artificial intelligence and streaming news, content, and information, and navigating autonomous vehicles, we will need a faster Internet connection. Most of the big telecom companies have rolled out some form of 5G, but the technology is not quite refined like it seems on the ads you may see. There are still glitches, limited range, and a lot of infrastructure to roll this out of big urban areas. The next decade will see this technology refinement and infrastructure development. On the flip slide, fiber optic cable also provides the type of speed that will be needed. Today, there's only about 25% of the United States powered by fiber optic cable. Google's Fiber company is one of the fastest growing, but it's costly to install fiber to homes and businesses. What I'm watching. With threats of net neutrality limiting what the Internet service providers (ISPs) can charge, this means that the regulatory landscape impacts investment decisions. All businesses and consumers will need higher-speed Internet in the future. Net neutrality is a double-edged sword. It could mean that a few companies are regulated or supported by the government to provide cost-effective high-speed access equally. On the flip side, if there is regulation without subsidies, it means the Internet service providers (ISPs) lack financial incentive to provide high-speed access. Without net neutrality, the ISPs have the right to choose to block sites, speed up or slow down service to customers based upon what level of service they pay for and how much data they use, or even provide fast lanes directly to the streaming services. This gives them the financial incentive for the important infrastructure development. This is an important regulatory debate that has two good arguments on each side. Either way, I am carefully watching the investment being made by the big telecom and ISP providers to see what they will do in the future. In the aftermath of the 2020 Coronavirus Pandemic, it is unquestionable that speed of Internet access will be demanded by all. How government regulation of this industry impacts innovation and speed to market will be important to watch closely. Google's founder, Eric Schmidt, has posited that the Internet will splinter, and we will see a different connection in different parts of the world. The implications are profound if the World Wide Web suddenly has borders and tariffs to be paid to cross those borders. Many argue that has already happened. With new technologies like blockchain (as a means of connecting computers together), it's possible we could see a migration to a new way of connecting everyone -with the ripple effect into the "smart everything" world into which we are evolving that has big questions on when, how, and what does it mean. What I'm watching. I'm closely watching the implementation and enforcement of GDPR in Europe. It's likely that the United States will also enact some legislation to protect privacy and hold businesses more accountable for business conducted online. Within the United States, some states, like California, are already doing just that. As we end up with a complex maze of rules to follow, it complicates how digital business is managed and how companies plan for the future. And it creates the opening for a new Internet or way of connecting everything to form. As that happens, the rules of the road could change. I'm also watching the fines charged against tech companies. For example, Google was fined $1.7 billion for its unfair advertising practices in Europe and has subsequently faced claims upward of $9 billion for violations of antitrust laws. Facebook could face up to $1.63 billion in fines over a data breach violating the new GDPR, and Amazon is under investigation. I also continue to watch how Internet policy is developed globally and whether "new webs" form. If that starts to happen, companies need to pay attention quickly and make smart decisions about its entire Internet infrastructure. Why this is a trend. In the last couple of years, as leaders from Facebook, Google, Amazon, Twitter, and Apple have been invited to Capitol Hill to help legislators understand their business model, the great awakening has occurred. Consumers and lawmakers alike now realize that all of these "free" platforms come at a cost -privacy. As cameras and voice-activated devices infiltrate every facet of our daily life, the ease of invading privacy is no longer science fiction. Hackers can tap into your Nest cameras, Ring cameras, Zoom meetings, and devices to peer into your private life. Combined with the vast amount of data just a handful of companies possess and their ability to favor their own sales channels and advertising over others, expect to see an increase in antitrust investigations and data privacy legislation. In a post-pandemic era, there are many who believe that these issues will be dismissed in favor of public health. The technology already exists to track and trace people, but does that violate constitutional rights of citizens? Does that infringe on privacy in a way that is not acceptable? In my interviews with board members on this issue, I've found that those located in hard-hit areas like New York City say that for the greater good, we all have to give up our privacy rights. Others, however, maintain that we can't allow this to occur or further liberties will be eroded. Balancing technology with privacy rights and varying degrees of intrusion for what some view as a greater good or convenience will continue to be a policy debate in the future. What I'm watching. No matter which political party is in power, there will be scrutiny of the big five: Google, Amazon, Facebook, Apple, and Twitter, as well as others. Despite political polarization, this scrutiny is largely bipartisan and is one voters want addressed. I'm watching pending legislation and investigations by agencies into these companies and how big tech CEOs are positioning themselves for what's coming and alternative strategies forward. I'm also watching how privacy will become an industry. Consumers may pay a service provider to help them monitor and protect their privacy, particularly as laws evolve with a "right to be forgotten." Likewise, as businesses may need help complying with all of these laws, expect to see a cottage industry form around privacy. If a post-pandemic era includes significant surveillance or monitoring, particularly related to travel and gatherings, then expect to see increasing regulation of how that information is used. The cottage industry to help individuals protect their privacy will emerge stronger than ever. Why this is a trend. In the next decade, alongside privacy as an industry, the concept of oversight of artificial intelligence and robotics will also become an industry unto itself. It's a trend because the dangers of bias in artificial intelligence are well accepted. The CEO of Google, Sundar Pichai, in a January 20, 2020, Forbes article cited the need for regulation. Bias forms in multiple ways in artificial intelligence. Amazon was using AI to help recruit for its tech teams. It used data sets from who had been successful in the past. That data set was comprised almost entirely of men. Accordingly, the AI used data that favored men and was biased (unintentionally) against women. If the data going in has a bias, the data going out will share the bias. Likewise, if AI doesn't have all the information it needs or encounters a new situation, it may not perform as we would like. Many of the self-driving car accidents have been a result of AI that didn't know what it was encountering combined with sensors delivering inaccurate or incomplete information. The Boeing 737 Max jet crashes of 2019 have also been cited as potentially a combination of AI and sensors getting it wrong combined with humans unable to override it fast enough. Additionally, AI learns based upon interactions. Depending upon who is interacting with early AI, it could become biased by those individuals. As we integrate more AI and robotics into daily life, the need for some human oversight is clear. While regulation will be important to ensure responsibility is factored in, the opportunity for companies to create human oversight as a job or as a service will grow. It's hard to audit yourself. This is why outside "oversight" or watchdogs may be needed or regulated in the future. What I'm watching. I'm closely watching the companies that are building AI such as Apple, Amazon, Microsoft, Google, Facebook, IBM, Intel, Salesforce, and others and how they propose to self-regulate. I'm also watching how the governments of the world begin to address this issue, as well as new companies forming to fill this gap. While it's commendable that the big tech companies are offering to self-regulate before there is an "Enron" situation or a "Cambridge Analytica" (this is the company that exploited Facebook's lax policies on data) moment, it's still concerning that such a few companies could house so much data and power. Typically, companies are not great at self-regulating. That's how we ended up with Enron. I'm watching closely how the regulatory environment changes. Directors should keep an eye on this, too, and continuously question how the company uses AI and robotics and how it is ensuring a bias or unintended consequence is not happening. Why this is a trend. The technology for virtual reality is almost where it needs to be to become more than just a game or a toy to something that truly transforms experiences. The potential to allow grander and more enriching experiences will impact health and wellness, travel and tourism, shopping and retail, as well as gaming and entertainment. Imagine for a moment that as you age and can no longer physically travel, you have regrets of never visiting the Sistine Chapel or hiking Machu Picchu, but you could visit a high-end 4D virtual reality center and spend the afternoon seeing, feeling, and hearing everything you might while actually there. Or, if you were wheelchair bound at a young age and wanted to know what it might feel like to walk the Great Wall of China. Or, if you can't afford to travel long distances or take the time off of work, but want to see the Northern Lights, all of this can be possible. Likewise, if you are living in a cold environment in the winter and could mediate for a half hour a day on a warm beach, might that change your physical and mental outlook? The possibilities are endless in improving the quality of life through this technology. If through augmented reality you can picture a new living room set or paint color in your house or try on that new dress or suit and then purchase it, it could transform what we want from our retailers. All of this technology exists but is not refined or cost-effectively available. That will likely change in the next decade. The 2020 Pandemic highlighted the need for such services and technology. In the aftermath, many people may no longer feel safe to travel in the way they did previously. And, after a lock down, the need to have a way to escape will become in high demand. What I'm watching. I'm closely watching the rollout of new products and the level of technology. Facebook owns Oculus Rift, which is one of the best VR headsets available to consumers. There are many others and researchers at MIT seeking to use commercial-level VR combined with true 4D experiences. In fact, one study allows individuals to feel like they are a tree in a rainforest and know what it's like if a fire is coming toward you. In a combination of spiritual and awakening, the experience is transformative. As spas and hotels roll out virtual reality-based meditation rooms as a new form of recreation or escape at affordable prices, we will see a shift in global spending on travel. Likewise, health care could truly change if the mental state of a patient could be improved all from a hospital bed or at home. Directors in these industries should be thinking about how this could disrupt or complement your existing product offerings. It could also improve daily experiences for employees if they are able to take a "power trip" in the middle of the day to refresh and reenergize with a fresh perspective. Why this is a trend. Much of the innovative trends discussed here have largely had a consumer impact. Behind the scenes, the supply chain is being transformed. Blockchain as a new form of a database connecting an entire supply chain together could reduce costs and improve transparency. Industries like insurance, digital rights, financial services, food suppliers, trucking, and distribution, to name just a few, could be impacted. I wrote a book in 2018 entitled Blockchain in the Boardroom. If you want a full deep dive into what blockchain could do, check it out. For now, know that vertical industries investing in blockchain could see a disruptive force to their legacy systems. The rationale is that the blockchain database could be more secure, reduce costs and employees needed to manage transactions, and improve traceability within a supply chain. In the aftermath of the 2020 Coronavirus Pandemic, many blockchain researchers I know and talk to are looking at how blockchain could help with supply chain in the medical industry and food industry to solve problems faster when needed. What I'm watching. I'm watching companies like Microsoft, IBM, Walmart, Bank of America, Fidelity, and Ernst & Young who are out in the forefront of development and test cases using blockchain. As they refine this technology, we will determine if blockchain will truly be transformative. The challenge for blockchain is that there are big legacy systems to overhaul and for it to work requires everyone in your supply chain to cooperate. Why this is a trend. The tipping point is clearly coming even in Silicon Valley as venture capitalists begin to report a concern about the lack of profitability in even their most promising investments. As companies like Theranos and WeWork have turned out to be fraudulent, masquerading as a tech company with creative accounting to hide the reality and Unicorns like Uber, Airbnb, Snapchat, and so many others are still not turning a profit after nearly a decade in business, the market may no longer tolerate such a long and expensive lead time to basic business fundamentals with outsized valuations. While there will still be venture capital investment for scaled innovation, there will likely be greater scrutiny even for a charismatic CEO. While investors will still look for visionaries, they may temper the erratic behavior of a Founder-CEO sooner. What I'm watching. I am carefully watching what big venture capitalists say at conferences and in interviews, as well as what is the word on the street from companies trying to raise money in a new climate. I'm carefully looking at the companies that remain teetering on the edge of profitability for another dot-com-like crisis where the irrational exuberance bubble eventually bursts, likely this decade. It could also impact the entire "sharing economy" model. Why this is a trend. For the transformative technology that exists (i.e., artificial intelligence, the Internet of things, driverless cars, drones, blockchain, and others) to translate into real changes in our life, infrastructure changes will be needed to scale the potential. For example, our roadways are not designed for automated cars interacting with humans. Urban areas were not built for 5G and fiber optic cable. Most buildings were designed and structured for last century technology instead of a virtual, augmented, or fully automated component to the workforce. With climate change driving a need for alternative energy in smart homes and smart office buildings, something's going to change in the next decade. What I'm watching. I'm watching carefully the construction industry and how it is adapting to these new demands, as well as how and where fiber and 5G are being deployed. Which companies will provide the services needed to facilitate this change -there is opportunity there. I'm also carefully watching who is going to dominate the connection between artificial intelligence, the Internet of things, and voice-based search to create the standards that will follow us across our lives. Right now, this is Amazon, Microsoft, Facebook, Google, and Intel. Why this is a trend. Climate change pressure will go beyond how we use plastic or what car we drive into the very nature of how we deliver goods and services around the world. Combined with a desire to eat healthy, fresh locally grown goods, the demand for more locally sourced products and services will trickle throughout the supply chain. Referred to by consultants as "localization," this trend has been emerging over the last couple of years. Additionally, the need for more jobs in suburban and rural areas where the cost of living is more affordable for the average person will create new opportunities to produce and supply goods people need locally instead of on the other side of the world. While global commerce is certainly not going away, there will be an increased demand for alternatives to shipping goods across the world and supporting local businesses. In the aftermath of the 2020 Coronavirus Pandemic, sourcing goods from China will be carefully reevaluated by many companies. The need to source essential goods locally to expedite delivery time will increase as businesses reflect upon the impact of the 2020 Pandemic. What I'm watching. I'm carefully watching changes in the agriculture and food production business to allow for production of food in new ways that can be grown and delivered locally reducing the carbon footprint and increasing nutritional value. Companies like Amazon are helping their employees begin distribution companies around the globe to better meet distribution channels with less long-haul trucks, cars, planes, and boats required. Of course, trade policies impact long-term strategy of businesses as they prepare for a potential future where cheap overseas labor may no longer be cheap. I'm also watching the companies that start building community-driven training programs or partner with universities to feed well-trained graduates into their companies to allow for the human capital needed on a more localized basis. I anticipate we will also see a shift in how medical equipment and supplies are sourced in the aftermath of the 2020 Coronavirus Pandemic. Governments and healthcare systems alike will look for domestic sources of important equipment and set policies to drive that goal. Why this is a trend. The Baby Boomer population is aging with more health care available than ever in our history. They will live longer than any generation before them. Gen X, Millennials, and Gen Z will all live longer than previous generations. At the same time, the system that promises to pay retirees for their health care will eventually run out of money. The business of health care simply has to change or evolve. Additionally, artificial intelligence and robotics will disrupt hospital and medical care. The same issues that have already been addressed about privacy and oversight are amplified when it comes to our health because the unintended consequences can be life threatening. The concern for a cyberattack is also of greater concern. In the aftermath of the 2020 Coronavirus Pandemic, preparation of the health-care system for future viruses or pandemics will become part of the new normal for the business of health care. What I'm watching. I don't expect this to be fixed in Washington D.C. in such a polarized environment anytime soon. I'm carefully looking at the entrepreneurial community and innovation labs from Fortune 500 to innovate new ways to help the health-care industry cut costs, improve security to avoid a catastrophe, utilize biometric and new tools to better deliver services, drive health and wellness from the start, and help make health care more affordable. Government will have to fix the end game solution of how it is all structured and reign in insurance and pharmaceutical companies, but in the meantime, look to the innovation of entrepreneurial companies and innovation labs to help solve the surrounding problems. Fast Company puts out annual lists of innovative companies by sector, including health care. This is a great source for tracking the companies that could change everything. I am also watching ethical issues about who owns your DNA and what can be done with it. While many have flocked to companies like 23andMe or Ancestry to get a DNA test, many don't realize that those companies now own their DNA. This will likely get more attention in the future when policy makers determine who can own DNA and what they can do with it. Why this is a trend. It is widely accepted among security experts that we will never be "safe" or free from cyber threats. In fact, many cite concerns that the big one is already planted in systems and just needs to be activated. Despite increased attention to this issue, as companies are facing so many threats and a bit of fatigue on the subject of cybersecurity, this one could get less attention at the time it is needed it the most. Much like how Enron awakened the public and government to the threats of self-dealing and lack of transparency in accounting practices, the same may be true in cybersecurity practices. I go deeper into cybersecurity in the next chapter. What I'm watching. I'm closely watching how the Securities and Exchange Commission (SEC) is beginning to hold boards and corporations more accountable for their cyber readiness. I'm watching legislation that has been pending for several years to address this issue. I'm also watching closely which companies continue to source critical IT services from China, the Ukraine, and other hot spots for potential corruption or intrusion. See more in Chapter 4. Why this is a trend. Bitcoin was just a teaser and is mired in controversy because of nefarious activity associated with cryptocurrency. But, new forms of trading a digital asset of value will be demanded as consumers seek alternate ways to participate in economic growth. Digital currency already exists in video game culture and many Internet-based ecosystems. The same concept exists for those who buy gold or art as an investment. It's not hard to see this translate into digital assets of new forms. What I'm watching. I'm watching the big financial players and their patent portfolios carefully. This helps me understand what new tools they may deploy to create the infrastructure and credibility needed for digital assets to begin to replace traditional currency. I'm also closely watching the governments of the world as they will begin to regulate digital assets to provide some stability to the market. Finally, I'm watching Apple, Google, Facebook, and Amazon as they could most easily roll out and scale their own digital dollars. Further, peer-to-peer payment systems will also likely further develop. These are just a few of the digital-driven disruptive tends I'm watching as we move deeper into the 2020s and beyond. The next decade is a big one. Unfortunately, it started with a global shutdown during the 2020 Coronavirus Pandemic. Many of these trends will be amplified as a result, few will stall. The disruption that is coming from these trends was thrust onto everyone during a shutdown, but as things return to normal, focus should be paid to how those trends will accelerate. We will see not just technological advances, but the changes in infrastructure and society required to move us out of the roaring 20s and into the next midcentury age. The companies that pay attention to the trends, set the right incentives for their workforce to adapt and change, and embrace a culture of continual change and improvement will survive and drive our future. The role of the board of directors in providing governance and oversight in this critical decade will change as everything around them does. I hope you will have the intellectual honesty to question old assumptions, see potential new future possibilities, have the moral courage to question management when needed, and offer the leadership we all will need from Corporate America. There are, obviously, so many other areas to explore; I've selected for a quick overview the ones that have the most pervasive impact. Other trends to be watching include the race to space including minisatellites and consumer travel of the future, as well as continued exploration of space. Like all of the other trends we've discussed, the question of how it will be governed and who will have control is pervasive. Media and content, of course, has now evolved to the Streaming Wars. Integrating with 5G speed, the Internet of things, and the integration between gaming and entertainment and shopping will continue to be trends to watch, as well as consolidation of the streaming providers. Content will get easier to produce, but the distribution will become further consolidated putting a lot of power in the hands of a few. Biometrics will continue to be a path to greater security balanced with privacy concerns. Consumer goods will also change as Millennials and Gen Z think differently about what they buy and what they value. The way people shop and interact will change. After the 2020 Coronavirus Pandemic, there was already a shift in what types of food and home goods people demanded. I'll cover more of this in Chapter 5. To make sure everyone has some of the basics covered, I've outlined some important elements about the fundamental underlying technology to these trends in Appendix A. Human behavior is surprisingly consistent even if the scenery and circumstances change. That's why all of these trends are about more than just technologyit's technology matched up with consumer behavior. In the next few chapters, we'll explore what's happening in cybersecurity and what vulnerabilities are created, as well as the societal shifts that are coming in consumer behavior and the future of work. All of these factors will create new challenges and shape the trends as they unfold. The challenges are opportunities for the businesses who can solve for them. As you approach this broad topic of digital disruption in the next decade from the boardroom, be sure to not just understand the overarching trends, but consider the following key components: Interconnectedness: None of these things will happen in isolation. Everything is interconnected. As you address the disruptive trends outlined in this chapter, leverage cross-functional teams who bring different perspectives. Build advisory teams outside of your organization who come from different points of view to ensure you aren't missing something. Too often, leaders surround themselves with others just like them -diversity of thought is the future of diversity and the only way to understand fully how these future trends impact you positively and negatively -it's opportunities and challenges equally considered. Partnerships and strategic alignments: These will become essential to future business. No one business will be able to dominate all of the areas, so leveraging other businesses and strengths will become a key to future success. Carefully consider with whom you partner and how -it could mean the difference between obsolescence and survival. Supply chain management: While this has always been an issue, developing a more streamlined supply chain and cultivating a supply chain with less risk will become increasingly important. While the past theory has been to squeeze everything you can out of a supply chain, a migration toward greater loyalty and partnership will likely be key as these trends engulf all industries. Labs and hubs of innovation: You will not survive without investing in places internally where innovation can take place without an immediate return on investment. Not only do you need the creative and innovative ideas, but you need to attract and retain a workforce from future generations to survive. See more in Chapter 5 about the future of work but know that future generations want to feel connected to where they work and believe that what they are doing makes a difference. Creating spaces that invite innovative thinking and allow for idea development without an immediate financial return on investment will be critically important to all businesses. Additionally, consider programs that can help facilitate open innovation (meaning attracting innovative ideas from the outside). This can be through vendor relationships, as well as partnering with incubators and universities. Mergers and acquisitions: Acquiring the technology or accelerating your growth in an area will always be an attractive option for scaling quickly or taking out a competitor early, but be cautious you don't destroy the culture that created whatever it is you are acquiring. In the last couple of decades, companies have gobbled up smaller players to remove them from the marketplace, but also, in many instances, lost what was making that company special. Amazon, or Facebook are splintered in antitrust campaigns, will that impact your business? 14. Do you have a cohesive and holistic strategy around emerging technologies What timeline does your technology strategy address? How soon do you predict these trends will impact you? 16. How close are you to actively implement AI vs. your industry and competitors? How will your company's human capital use artificial intelligence? Who will you partner with to connect voice recognition, artificial intelligence, and things? What are the potential consequences of how you use artificial intelligence? How do you attract and retain talent through innovative programs?