The future of business

It’s Monday morning and you’ve just arrived at the office. In fact, this is the first time you’ve been in for two months. Of course, you’re not an employee (very few people are these days); rather you’re an ‘associate’ who has a longterm relationship with the company. It’s not your office either: it’s a shared, flexible space. The company itself is a medium-sized wearables consultancy called InfoDress and you’ve been a tier-2 associate for four years now.

A day at work in the future
Your relationship started when the firm was much smaller and was still incubating within its parent business. You were a customer back then, but the company’s AI noticed how insightful your product reviews were. They asked you along to a group meeting and you were taken on as a tier-4 customer insight associate. Now, you’re their consumer anthropologist.

A tier-1 associate walks in. She’s your proximate senior and has just been to a meeting with the head of HR about the company’s diversity problem. For years now, men have been falling behind women in terms of promotion and connections and there are concerns that the company is becoming less relevant to male stakeholders. It was, she says, a very difficult meeting; she needed a power ten minutes with her virtual coach afterwards to de-stress.

You were going to tell her about the problems you’ve been having with the alternative currencies broker who is trying to find you a crypto that is likely to move against public sentiment in the upcoming US elections so you can hedge movements in the value of your data. But you judge it more empathetic to display constructive ambiguity. So you ask the office AI to set up a meeting later on with you, her, and an augmented reality expert who has the best score in the industry for delivering positive outcomes.

You both buy a coffee from the shop in the foyer, which is run as a cooperative. As you drink, you discuss topics ranging from implantables to smart dust to the recent wearables spying scandal that, more through luck than design, has resulted in a social media win for your organisation. You like the tier-1 associate. She is what the Gen-Zeders call a ‘workmate’, having reprised this old term to mean someone who is both colleague and friend.

After the coffee, the associate (who is fully employed by InfoDress) heads off for an hour’s me time. You order a self-driving car to a nearby smart-infrastructure multiventure where you are working on a short-term ethics contract. It’s likely to be another tough conversation: they don’t seem to understand that their mindset, which is still very millennial, is why they are struggling to attract thebest Gen-Z associates. It’s no longer just a case of having the right values.

Finally, it’s off home to work on your side project, a purpose-driven foods business. Two years ago, your own coach suggested you set this up because you needed more entrepreneurial experience to round out your professional profile. It would, he said, make you relevant to a new audience and address gaps in your network. Now, it looks like it might actually become profitable.

The future of professional life
Of course, this is all conjecture about how a working day might look from the position of a successful professional, some time around 2030. But while the detail is invented, it draws strongly on trends that are already all around us. The person is not employed in the traditional sense. Rather, she has an association with the company that is a mid-point between a traditional job and ‘gig’ work. She also runs a small business and does contract work. The industry she works in is wearable high tech and has one foot in consumer electronics and the other in the data these devices generate.

The lines between customers, suppliers, and staff are very blurred indeed – as is the line between work and play. Millennials are now well into most management tiers, but they are starting to worry about attracting the very best members of Generation Z, who don’t share their world view.

The industries of the future
There’s a pretty good consensus around what the current big drivers of change in the business world are. The first is the digitisation and connection of everything via the Internet of things. The second is AI, machine learning, and robots. And the third is genetics. It may be that in the years to come the last of these really takes off. As Alec Ross, author of The Industries of the Future and member of Julius Baer’s Global Advisory Board, says,

The last trillion-dollar industry was made out of computer code. The next one will be made of genetic code.

This is not quite the whole picture, though. There are also societal trends that are reshaping the way we live – and will interact with these drivers in unpredictable ways.

These are factors such as an ageing population, particularly in Europe. In the EU-28, the share of people aged 65 and over is projected to increase from 18.9 per cent in 2015 to 28.1 per cent by 2050, while the percentage of people 85 and over will grow from 2.5 to 6. Thus, it is a pretty good bet that healthcare for the elderly is going to be a big – if unglamorous – growth sector. The Internet of things and robots are both likely to have a significant effect on how the growth of elderly care pans out. It’s a similar pattern with other big change industries. If you take the automotive sector, the technology already exists to deliver driverless cars (and countries such as the UK are preparing legislation to deal with them). Early last year Elon Musk said,

My guess is that in ten years it will be very unusual for cars to be built that are not fully autonomous.

But what will this mean for the world of business? Proximate effects such as the disappearance of taxi driving and truck driving as professions are easy to predict. Others, though, are far less obvious. If – via pools of hailable cars – driverless cars lead to a huge fall in auto ownership, what will all that free space on the roads mean (as most owned cars spend 95 per cent of their time parked)? And will driving become like flying, where people take productive work along to do? Will meetings in cars become the norm?

Genetics is perhaps the biggest ‘what if’ of all. It holds out the potential to deliver everything from plastic-eating caterpillars bred to clean up the world’s waste, to algae producing bio-oil, to the end of conditions such as deafness. How changes such as these will mix with other factors is still a big unknown. Here it’s always worth remembering that, in the early days of social media (way back in 2007), nobody imagined that armies of Russian bots would be affecting US elections.

The management of the future
If you want to see how the business of the future might look, you could do worse than visit one of the co-working spaces that have sprung up in cities like London and Berlin. These have quickly become ecosystems. The branding consultants on the second floor refer people to the app design start-up a floor down, who are clients of the delivery business in the space next door. Perhaps the most interesting recent development here, though, is that traditional companies (such as KPMG and HSBC) are now setting up outposts in these places because they want to be part of this ecosystem and they want to work with the new businesses emerging from it.

More generally, says Cary Cooper, professor of organisational psychology at Manchester University business school, the world of work is going to be more malleable, more technologically enabled, and companies are likely to be more dispersed.

The leaders of the future need to be more flexible, more empathetic, and more socially skilled

he says. “They’ll need to manage relationships with people, with technology and, eventually with machines.” They will also, he adds, need to manage people’s fears about the accelerating pace of change and the rise of smart machines.

Companies are also more likely to be asked to provide a sense of purpose and have values that customers and employees agree with. In a recent survey undertaken by EY’s Beacon Institute and Harvard Business Review Analytic Services, 90 per cent of executives said their companies now recognise the importance of having “an aspirational reason for being which inspires and provides a call to action for an organisation … and provides benefit to society”. These companies tend to be better run and attract better staff.

Along with this meaning, those who work for the companies of the future will expect greater flexibility in their working patterns, greater autonomy, and far more feedback. Professor Cooper believes that all these changes point in one direction. “What we really need more of,” he says, “is people with higher emotional intelligence. I think the future of work is female.”

Preparing for the future
Regardless of the industry you work in, you should be expecting disruption and change and looking to future-proof your business. But here, the odds are against you. According to Julius Baer’s Next Generation research analysts Fabiano Vallesi and Alberto Perucchini, dominant internet and digital players with an edge in data capture, AI and big data analysis can leverage their capabilities to enter and dominate nearly every industry, to the detriment of incumbent firms.

So what can you do in a world where change is accelerating and is often so multifaceted that it is virtually impossible to predict? The first step that you should take is to expect change and have the flexibility to deal with it. This can mean everything from greater diversity to being close to your customers to collaboration with competitors to being able to make decisions quickly. The second (closely related to the first) is to build resilience. Of course, all this is easier said than done. But as they say, “It’s tough to make predictions, especially about the future.”

Next Generation Studies

Our Next Generation investment specialists and portfolio managers are monitoring developments in artificial intelligence, automation and robotics and have written about the key drivers and challenges associated with these trends. To order our studies ‘Automation & Robotics: Taking a pause before the next run’ or ‘Artificial Intelligence: Driving the next technology cycle’, or any other of our Next Generation Studies focusing on structural growth opportunities related to long-term megatrends, please contact your relationship manager or send your request via our contact form. Please note that restrictions may apply, depending on your domicile and the legal entity of the Julius Baer subsidiary servicing you.

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