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From
November 2008 Resource
Emerging
Technology: Shaping the Future
Futurist
Dr. James Canton discusses the emerging trends and
technologies that will shape
the future
of the industry.
By
Tammy J. McInturff
Resource
recently
talked with leading futurist, author and keynote speaker Dr. James
Canton, CEO and Chairman of the Institute for Global Futures,
www.GlobalFuturist.com, to get his insight on emerging technologies and how they
will affect the industry and our future.
Canton is a renowned global
futurist, social scientist and business advisor.
He is the author of The Extreme Future: The Top Trends That Will
Reshape the World for the Next 5, 10 and 20 Years and Technofutures: How
Leading-Edge Innovations Will Transform Business in the 21st Century.
An authority on future trends in innovation, Canton has been
insightfully predicting future technology and business trends for over 30 years.
The
Economy
The economy is on everyone’s
mind right now. Many companies are
tightening their belts and cutting their IT budgets while pondering how bad it
is going to get. Resource
asked Canton about his assessment of the current business environment and how
the economy might affect emerging technologies.
Surprisingly, Canton seemed optimistic about the economy and the
potential for economic growth.
Resource:
What is your assessment of the current business environment?
Canton: I
think the current business environment may look challenging but there is much
upside as well; especially for those who thrive in changing times. You cannot
have opportunity without risk as we are experiencing today. U.S. Gross Domestic
Product (GDP) is still growing at 3.3 percent.
Global GDP is stronger than ever, over seven percent and much of that is
due to the growth of the emerging market economies. This is very positive for
the future. Growth is outstanding given all of the changes in the financial
sector. In terms of globalization
for the business sector there is tremendous new opportunity for expanding new
markets, finding new customers and opening up new channels.
For U.S. businesses the strength of the developing markets for
globalization has outstanding growth potential—led by innovations that the
U.S. has invented first. This presents a competitive advantage—of course it should—for
business.
New
technologies such as Web 2.0, new Internet and wireless technologies certainly
are making for a global connected world. New
technologies are also creating more efficiencies and productivities for
businesses whether they are selling domestically or internationally.
Over a third of real GDP is
being driven by innovation industries and there are entirely new
innovation industries that are creating new value as never before such as
nanotechnology, biotech and certainly the next stages of wireless, business
process transformation and IT innovations like cloud computing, pervasive
connectivity and virtualization.
However, there are clearly
challenges that we are facing in the financial sector in terms of the credit
crunch but I don’t view these as cataclysmic.
I view these as somewhat of the natural messy evolution of market
capitalism and something that gets out of hand and gets corrected every five or
seven years. Just think about it,
you can go back as far as junk bonds, then you can look at the savings and loan
crisis of the 1980s and 1990s, then we had the dot-com crisis and then the real
estate bubble and now you’ve got what we have now which is of course the
credit crisis. Every few years there
seems to be a certain crisis that has a upside and a downside.
We call it a crisis but it is
really the natural messy evolution of capitalism and now particularly global
market capitalism. Experimentation and global innovation in market capitalism
has led to massive wealth, growth, strong global GDP as well as dislocations in
the global economy. Market capitalism, now embraced by most of the globe is not
a precise science; it is a economic platform that is self-organizing and that
requires innovative experimentation. The results have been mostly positive but
not without some problems as we are facing now. This too will pass.
So I think the prospects for long term are great, but in the short term
we need to work out some of these clear challenges in the financial markets that
create more risk than opportunity.
Resource:
How do you think the current slowdown in the U.S. economy will impact emerging
technologies and new
technology adoption?
Canton:
The U.S. economy is fundamentally strong and resilient. There may be a recession
and an uptrend in unemployment but growth will continue. I don’t think there
is a massive slowdown in the U.S. economy right now as much as a perception of
greater risk and fear. GDP is
growing at 3.3 percent on a $14 trillion dollar economy.
Germany’s GDP is about one percent; all of Europe has GDP that is lower
than the U.S. The measure of the
economy’s strength and robustness is growth.
Our growth is at 3.3 percent; it is a full point plus over the Euro zone.
Now when you compare us to China or India there is slowdown in growth
that is going on and has and will affect us to a certain extent.
But I don’t view it as a deep dislocation in the U.S. economy.
There have been concerns that we are going to slip into a
recession—this may occur but it will not be deep and certainly the Fed has
signaled that. Recent actions by the
U.S. and other nations globally to invest in the banking system is very smart
and the right thing to do to inspire confidence.
Emerging
IT Trends
Future technology trends and
innovations will enable insurance companies to become more efficient and cost
effective. IT is one of the driving
forces behind competitive advantage in the marketplace.
Resource asked Canton to identify the IT trends he sees coming in
the near future and how these trends will affect the life insurance industry.
Resource:
What global IT trends do you see coming in the next five years?
Canton:
The most important trend I see coming in the next few years is the
expansion of the global marketplace in terms of outsourced services.
For U.S. Companies the expansion of Web 2.0, Internet connectivity, the
addition of another half a billion to a billion people that will come online
being connected to the global economy will be significant.
Also, the fusion of globalization and technology will result in more
efficient, cost effective supply chains as well as new markets driven by
pervasive mobility and global connectivity of the Internet which will create a
lot more seamless integration of markets, partner relationships, logistics, and
a much more transparent exchange of trading.
Resource:
What idea or product in terms of technology do you think is going to most
impact the life
insurance industry?
Canton:
The
life insurance industry is obviously facing a lot of challenges in the current
market environment. One of the
future opportunities and key drivers for the life insurance industry is going to
be life extension. We are fast
approaching the time when we can begin to accurately predict and enhance
people’s longevity through a combination of pharmaceuticals, life style
management and eventually even medical devices.
Personalized medicine is emerging. The consumer genomics marketplace is
emerging. We are living in the emerging Post-Genomic society, where genomic
information will be used to predict and promote health and life. We are living
in an era where people will be living dramatically longer than ever before and
the quality of their life will be much better.
So we are going to see a redefinition of aging and life extension. We
will use medicine and life insurance to reshape society for
enhanced human beings.
The
second key change I see has to do with cancer.
Predominately the two big risk factors that lead to mortality are cancer
and cardiovascular disease. We have
already begun to chip away at cardiovascular disease, although not enough people
are taking advantage of cardiovascular therapy such as statins but that will
begin to increase. In the future we
are going to see more personalized medicine that will begin to help people
manage cancer. Cancer will be a
manageable disease as opposed to a killer in the near future.
We will, with massive supercomputing and synthetic biology, better
understand how to prevent and cure some cancers in our lifetime.
The third key driver of change
for the life insurance industry is the mapping of an individual’s personal
human genomes. Now companies like
23andMe are offering to sequence your personal genome and analyze it against the
known 1,500 tests genetic tests for disease.
When people begin to start taking advantage of this technology you are
going to be able to map that to different kinds of new insurance products.
So I think there will be tremendous new life and health insurance
policies and products that can be structured based on these key drivers that
will give value both to consumers and the life insurance industry; that leverage
off of personal genomics.
Security
Trends
Security remains a top concern
for business and IT executives alike. It
only takes one bad security breach to ruin a company’s reputation.
Although, security remains high on most insurance companies’ lists of
top priorities, Canton said that most insurance companies still aren’t doing
enough to keep their data secure.
Resource:
What new trends do you see coming in the future around security?
Canton:
For security in a world where all data bases, networks, telecom banking,
business databases will all be connected increasingly over wireless Internet
platforms the challenges are going to be to balance privacy and confidentiality
of data with proper legal transparency.
Technology innovations are coming faster than security innovations.
And the innovations that are available for security are not being
adopted. So in the area of cyber
hacking, for instance, identity theft is growing over 1,000 percent a year,
which is just unacceptable. As more
things get connected there will be more security breaches.
So overall we have not done as well in business with adopting the
technologies that can protect and secure our data as we should.
Also, the innovations that are available in the area of security have not
really delivered on protecting privacy and data.
The other areas in terms of security
other than cyber are issues related to terrorism, crime and global risk.
Often the new face of risk is the global criminal organizations that
hijack data and sell it using all of he latest Internet innovations like
auctions, video conferencing and even online payments. Companies are, for the
most part, easy targets for this threat. Companies need to expand their ideas to
create a more holistic risk landscape. Risk
factors such as climate change, disasters and terrorism are risks that up until
recently most businesses didn’t consider were part of their security profile
but today they should be. We are
going to see greater emphasis on business continuity planning.
Most companies have some kind of a business continuity plan but quite
frankly it is not really developed enough to be able to deal with potential
issues such as climate changes, disasters or even emerging terrorism and crime.
The areas of crime, particularly cybercrime, are going to require deeper
collaboration between companies and authorities so that we can together work on
dealing with these problems.
Resource:
Do you think Insurance companies are doing enough to right now to meet
security requirements?
Canton:
No, I think the insurance
industry as a whole could do more to take a lead in innovating in the area of
security. There are a lot of new
developments in security such as quantum encryption and quantum computing.
There are individual insurance companies that are doing outstanding
things to protect their data and secure their enterprise but too many more are
not as actively investing in building threat scenarios and building the kind of
firewalls and technology that they will need.
Insurance companies need to be implementing security policies that will
take into consideration asymmetric risks, like climate change, disasters and
pandemics. We have one insurance
client that has been very interested in the impact of pandemics because of the
potential impact in their key markets.
There is a lot more that companies could be doing to become more aware of
and be able to actually even prevent security issues in the future.
Avoiding
Pitfalls
What
can you do to ensure that your company’s future is safe?
In this tough economic environment that is a question that many companies
are trying to answer. Canton
discussed some of the biggest threats that companies are facing today and some
of the biggest mistakes they are making.
Resource:
In general, what do you see as the
biggest threat right now to a company’s future?
Canton:
There are three or four
key threats. One of them is to not
move fast enough at embracing new technologies that will make your operations
both cost effective and more future ready. Companies
need to be ready to meet the challenges of a vastly more hyper competitive
environment where consumers have very high level expectations of companies
innovating. So the first threat is
not investing and leveraging innovative technologies such as Web 2.0, data
mining, business intelligence or knowledge management.
These are critical ways for companies to stay
competitive and to also be sustainable.
The second thing I don’t see
that I would like to see more of is better appreciation for talent management.
The insurance industry, as in most industries worldwide, is global and the
biggest issue is whether we will have the necessary people to be able to grow
our enterprise at the key levels that we need.
We are already suffering for depopulation.
How we are going to acquire the talent we need to grow is an issue that
every company should be planning for today whether it is succession management,
mentoring, procurement or retention. These
are critical issues because we are in a talent war.
The third threat to a
company’s future has to do with being able to create products that are in sync
with the changing demographics and financial needs of the population.
There is a lot more room for creativity in this area.
People will be living longer and therefore insurance companies should be
providing more structured investments that
can address both long term health needs as well as investment needs for an aging
population. The largest concen-tration of
wealth on
the planet is with the baby boomers.
We are going to have 78 million boomers potentially living an extra 10 to
15 years so they are going to need a whole range of new kinds of insurance
products. These products are not
really on the market today and they could be.
Resource:
What
is one of the biggest mistakes that you see companies making right now?
Canton:
One
of the biggest mistakes I see companies making right now is not listening enough
to the customer in terms of how their world is changing and how to get in sync
with their future vision of their world. The
second mistake I see companies making is not paying enough attention to
innovation. Innovation is not just
the latest and greatest technology. Innovation
is about the practical technologies that will help you become more agile, more
on demand and be able to be out front in terms of competition.
Looking
to the Future
If
there is one constant in business it is change.
Today, due to changing demographics and emerging technologies change in
the marketplace is happening faster than ever before.
Being agile is more critical than ever.
Canton discussed some of the
changes we will be seeing in the next few years as well as how the CIO’s role
will change.
Resource:
Do you see the way we do business changing in the next five years?
How?
Canton:
I think the ways it will
change is we will get smarter, more productive and more effective. We will be
outsourcing more. Everything that is
not core is going to get outsourced. And
even the definition of what a core competency is for business will change.
The smart businesses will be able to offer more value on pricing and more
value in terms of service because they will be using outsourcing capabilities
around the world. Also, products
will be better designed to really fit the markets that you are going after.
Imagine an insurance company
thinking and acting like Apple Inc. when it comes to designing products.
It would be an interesting strategy for an insurance company to think
about the implications for how it introduces design into its services and
products the way Apple introduces them. There
are ways the insurance industry could learn from other industries and best of
breed leaders. There is actually a
new kind of branding opportunity that may emerge.
Also, I think that decisions that consumers are going to make are going
to be made much more on which companies are both green and sustainable.
We are going to see a shift of
consumers and how they buy. In a
world where insurance products look like commodities to consumers increasingly
they are going to want to know about the values of the companies that they are
buying their products from. Today
there is not as much visibility in the U.S. as there has been in Europe.
I forecast that with over 95 percent of consumers viewing themselves as
environmentalists the insurance sector particularly will have to start to
embrace green strategies. Companies
will have to embrace strategies that will send out a message that not only are
they going to help insure you but they are also giving something back to make
the planet a better place. We are
beginning to see this with green IT in the tech center.
Certainly consumer companies are concerned about this, such as the
automobile industry, we are going to see this hit the financial service
companies next.
Resource: Will
the CIO’s role change over the next five years or 10 years?
Canton:
I believe that more CIOs
will out of necessity have to become more business justified in terms of their
strategies. CIOs are going to have
to understand the business in fundamental ways and make a case for technology
investments that will drive value. In
other words, they will be focusing on investments that will be able to drive
growth, drive new value and find new markets.
The CIO will have to become more market driven not just innovation
driven. In fact I think we are at
the edge of a major revolution in the way CIOs are going to operate.
I don’t think there is a CIO today that can get his or her budget
passed without a strong business strategy justification of what that technology
is going to do to drive the enterprise.
Emerging
Technologies
The insurance industry has a
reputation for being slow to embrace new technologies.
Whether you are an early-adopter or a laggard, knowing which technologies
to watch is essential to staying competitive.
Canton provided some insight into which emerging technologies will be
changing the way the insurance industry does business in the future.
Resource:
Have you been surprised by the
lack of growth or resilience in any areas of technology?
Canton:
I am surprised by the
lack of innovative technology adoption by some companies.
I have also been surprised by the decisions of some companies to pull
back on their investments in technology which I think is mistake.
When you cut back on technology investments you are creating a vacuum for
your competitors to step in and grow their market on the back of your missed
opportunity. So companies that are
kind of looking at the potential slowdown of the economy, which I don’t think
is wise, are holding back on technology investments such as business process
transformation or upgrading from legacy to more Web centric platforms.
I am surprised that there are some companies that still don’t
understand that innovative, adaptive technologies are what is driving business
value and what customers and consumers are expecting.
Resource:
What is the biggest technology change or trend that you see coming for
2009?
Canton:
For 2009, the biggest trend is going to be social networking, Web 2.0 and
the explosive convergence of the multimedia Web.
This convergence is actually going to emerge in 2009.
We are going to have very fast networks that are tied to mobile
platforms, rich media and video and this is going to become a very potent
platform for companies to advertise and for people to share ideas.
All of that is going to start happening and driving opportunities for
globalization. This will open up
entirely new marketplaces particularly in the developing world where business
will be able to expand. And in the
U.S. and developed nations this convergence of media will lead to entirely new
products that just really don’t exist today.
Beyond 2009 I am tracking a
major technological innovation called the Singularity and that is the time when
supercomputing, artificial intelligence, biology and the future Internet
referred to as the Metaverse may create a kind of artificial intelligence that
may become even aware of itself. I
am tracking the implications of this Singularity with a group of scientists from
NASA, Google, Microsoft and IBM. We
have all collectively decided that we need to track the emergence of super
intelligence because of the potential implications it may have for our world.
Resource:
What products or innovations will drive competitive advantage in the future?
Canton:
In
general, I think smart products that
can be upgraded and adapted for more niches will drive competitive advantage in
the future. Innovative companies
will be focusing on smaller niches and have smaller production runs of products
that can serve specific niches in the marketplace.
It could also be products that are designed by the consumer.
The consumer is going to have choices and maybe even design their own
kinds of products whether they are financial service products, insurance
products or even consumer products. I believe in a world where you are going to
have things like nanotechnology which can basically make products on demand you
are going to have a vast new kind of supply chain that is going to be much more
on demand, agile, responsive and cost effective for making limited runs of
products that consumers will also have a fundamental role in creating.
Resource:
Do you think the cut backs in IT
budgets will affect investments in green computing?
Canton:
I don’t think they should. The
message to insurance companies should be that you need to continue to invest in
green technology but that may mean that you don’t need to do it by yourself,
you just need to have better partners or vendors to outsource to.
The issue with green computing is a different strategic issue.
It is an issue of both increased productivity, cost effectiveness, being
able to not sacrifice customer service and product quality while incorporating
more green practices. It is a new
holistic way of thinking and operating. We
need both investments in innovation and we need green computing in order to meet
the needs of both the future organization as well as the future needs of
consumers.
Resource:
Do you think social networking Web sites will play a role in how we do business
in the future?
Will social networking Web sites change how we do business?
Canton:
Social networking sites already play a role in how we do business.
In the future they will be a fundamental part of the new reality.
Social networking sites like Facebook, Twitter or Flickr will play a part
and particularly Wikis will play a part. I
could foresee an insurance Wiki where I’m bartering, trading and auctioning
different features of my policy with other people’s policies and actually
I’m able to trade on my policy. There
is a fantastic new future of opportunity for insurance companies by leveraging
off of social networks. These sites
will enable insurance companies to understand better how to serve the consumer
and also put into the hands of consumers different kinds of mechanisms that can
allow them to increase the value of their own insurance assets.
Resource:
What role do you see robots playing in our future?
What area or industry will they have the
most impact?
Canton:
Robots will play an important role both in the home and in the industry.
We are going to see domestic robots that play a variety of roles.
Today we have robots like the Roomba that clean up the house.
Tomorrow we will have robots that are companions for people and that take
care of people with certain disabilities. Robots
will help with everything in the home from security to cooking.
In the industrial sector we are going to have robots building just about
every consumer device. There are
over 50,000 robots today that are building everything from cars to refrigerators
around the world, tomorrow robots will be building robots.
We are going to see more mobile, autonomous intelligence that will both
be fighting wars, taking care of the aged, as well as being companions for
people that are interested in the companionship of a form of a robot called an
android that will look, feel and maybe even smell like human beings.
Advice
for IT Professionals
Today, being an IT professional
in the life insurance industry is more challenging than ever before.
Innovations and new technologies are coming faster than ever, while IT
budgets are getting cut. Trying to
find the best solutions to help the business run more effectively and
efficiently is no easy task. Canton
offered some advice for the IT professional in the life insurance industry.
Resource:
Do you have any advice for
the IT professional in the life insurance industry?
Canton:
I would suggest that the
IT professionals in the insurance industry take into consideration how to
articulate what the key technologies are that will drive business value.
First, IT professionals need to have a good understanding of what the
current business strategy of the company is and really get clear on that.
Many companies themselves are getting clear on that.
Then IT executives need to think about how they can bring new value from
championing investments in IT. Some
of those investments may be outsourced solutions and some may be in house
developments but the whole notion of driving future business value is the
critical challenge facing IT professionals today.
In order for IT professionals to convince the business it needs a new
solution they first have to understand what the business strategy is and how it
relates to the products and services.
IT professionals need to be
asking how do we create an organization that is future ready?
How do we create an organization that will speak to the needs of the
consumer not just today but tomorrow? What
can IT do today to drive those opportunities to create and sustain that future
value? I think that is the
ticket for IT. I see IT
professionals needing to be at the table, actually crafting business strategy
with a much longer view towards the future rather than just having short term
responsiveness to internal customers.
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