Attention! Below the cut is a large text, in which we included not only the summari speeches, but also the answers that Kjell Nordström gave to the audience’s questions.
10 years in 10 weeks
The times we are experiencing are unique. In 10 weeks, the pandemic literally flew by 10 years, and 2020 transformed into 2030. For years we have been talking about the prospects for using new technologies, about the benefits and new opportunities that they provide to people and businesses. But as soon as the COVID-19 pandemic began, everyone began to use them. Business no longer requires employees to be present in offices, and customers prefer delivery services to hypermarkets.
Q: Are office centers a necessary thing or now, after the pandemic, can you say that this is an old, obsolete format?
A: The faces of Moscow, London or Stockholm will indeed change. Of course, there will be no shopping centers in the form that we are used to today. And global brands like Chanel or Louis Vuitton will not be embodied in stores and boutiques. They will be replaced by small showrooms.
Traditional office spaces will no longer be needed either. We will no longer see the huge crowds of people who came to these glass towers in the morning and returned from there in the evening. We already understand that we can carry out business tasks and implement projects without these towers, and we will do so. Not always, of course, but we will perform 20-30% of tasks remotely, and this will change the face of our cities.
Of course, the pandemic itself does not play a decisive role in these changes. She simply hastened what sooner or later would have happened without her.
For a very long time we were going to use new technologies for communication, education, and nothing happened. And suddenly, in one moment, everything changed. At the same time, the virus itself did not make a fundamental contribution to the existence of people. He simply accelerated what would most likely have happened anyway. And the capitalization of the six largest IT companies in the world has reached 30% of the total capitalization of all the others, whose shares are traded on the New York Stock Exchange.
We cannot make an accurate prediction of what will happen in the future, Kjell Nordström emphasizes. But we can describe what is happening here and now, the quantitative and qualitative changes that we observe.
Q: What do you think, what percentage of your predictions are from the book “Funky business“ come true by 2020?
A: From 90 to 100% of what is written in this book has materialized. But we underestimated some aspects, namely the incredible power of technology. We allowed ourselves to be bold forecasters, but the world has changed even more than we expected. The scale and factor of technology has remained underestimated.
Q: What book are you working on now and has COVID inspired you to start a new job?
A: COVID inspired me immensely! I have never seen such rapid changes. What has happened in the last 5-6 years does not compare with what I have seen in my life before. And I want to summarize these changes in one book, because they indicate the direction of our life for the next 5-10 years. So the new book will build on what we’ve been through lately, and in it I’ll talk about how the world is going to change.
Four dimensions of new strength
Modern life is reminiscent of the well-known film “The Matrix”, according to the plot of which any person is under the control of some powerful force. “This force has four dimensions today,” says Kjell.
The first dimension is the “hot matrix”. Kjell pays special attention to climate change. The rise in the average temperature of the Earth is already having an impact on any kind of activity, and will soon lead to industrial transformation. Perhaps it will become more ambitious than the industrial revolution of the late 19th century.
The second dimension is the “capitalist matrix”. All, with the exception of one, the countries of the world today live under capitalism. It has become a universal commercial language that is understood all over the planet. True, every country, be it Germany or China, has its own “dialect,” a particular form of capitalism to which one must adapt.
The third dimension is the “urban matrix”. Kjell repeats his thesis from Urban Express: in 30 years, state division will lose its fundamental importance. Up to 85% of the world’s population will live in the 600 largest cities, and these cities will create up to 90% of the economic product. Wherever we live, we become participants in this process.
Finally, we are also governed by the “information matrix” covering the entire industrial and technological complex. These are technologies, digitalization, artificial intelligence, which continue to develop progressively.
Q: Who controls the matrix? In the film of the same name, it was the Architect, but who do we have?
A: Technology and digitalization have become a genie released from the bottle. The same Internet, which does not have a specific center, any owner, is more than any state or organization. So there is no master when it comes to technology development. There is no specific owner of the matrix, there are general consequences of what we humans do.
Pessimists claim the matrix is out of control, but I don’t think so. Sooner or later we will begin to manage it, but now there is no Architect.
Consequences of universal digitalization
Anything that can be digitized will be digitized. This became known when information technology had just acquired its modern form. Nordström gives a simple example: Spotify, a service that forever changed the music content market, once dominated by record labels with their studios and record stores. Today, to get access to all the music created by mankind, it is enough to pay $ 10 a month. And this is just one of many examples of the embodiment of global digitization.
But it also has other consequences. First, universal digitalization makes intelligent work not a privilege, but one of the services. If we need the results of intellectual work in any area, we just need to use the service on demand, to which we can connect at any time over the network.
And secondly, any work today can be done remotely. And we could be convinced of this thanks to the coronavirus pandemic. For the first time in the past 150 years, the idea of a business is undergoing a complete restructuring, a complete change of concept. We can now work from home, meeting with colleagues in person two or three times a year. And that turns out to be enough to be productive.
After digitization, knowledge becomes free and available to all people. But not every knowledge can be digitized.
The Spotify example deals with articulated knowledge – that which can be transmitted textually, orally, in the form of videos or sounds. But there is also other knowledge, non-articulated or implicit. It is impossible to digitize it, and it will take on special meaning during Industry 4.0.
It is, of course, about experience. Each person knows more than he can express. Nordström cites acupuncture as an example. Almost no one, not even an acupuncture master, can explain how it works. But this method of treatment does not become less effective and less in demand. Quite the contrary: the masters have students who acquire this implicit knowledge following their mentors.
Q: After the main wave of the pandemic has passed, how do you think the set of universal skills that are absolutely necessary for the successful existence of human skills have changed? Can you name three main ones?
A: First: you must be able to manage yourself, be your own manager, your own director of the company. You need to be able to organize yourself. We work at home, colleagues no longer look askance at us, we no longer have a canteen where we go for lunch, there is no structured form of the working day, so it is important to be able to organize yourself on your own. Do not forget that we are used to being surrounded by people: in a school class, in a university group, in a company, in a military unit, in a religious community. Usually we always exist in a group, but now we are our own organizers, and for many of us this is a completely unprecedented way of life.
Second skill. Now business is a network of people scattered all over the world working remotely, and we need to find a way to communicate and build a corporate culture. In digital form, just a little so far, but we should feel like a part of something whole. Digital albeit, there must be tools that can bring people together so that they feel part of something bigger.
Third skill. Let’s go back to the question of knowledge. It is very important to remember that everything we do when we use a computer, digital tools, technology, can and WILL be copied – by our competitors, our colleagues. We need to have skills that complement basic, routine digital skills.
In any field, knowledge has implicit roots. And it is this that will become the main competitive advantage in the era of the Fourth Industrial Revolution. Access to an array of articulated (and therefore digitized) knowledge will no longer be able to give any company unique advantages – it will become publicly available. But knowledge that cannot be transferred by technology will retain its exclusivity. This means that a real tectonic shift awaits us: from the use of articulated knowledge to implicit one.
Q: In connection with the massive digitalization of knowledge and the widespread introduction and spread of AI, how do you think the format of education will change? Will there be a place for classical universities in the future?
A: The best way to explain the situation is to look at the banks. Remember how the banking segment and financial services have changed. We have created two different forms of banking activity. There is something that you can do on your own using a mobile phone or computer (all this, again, can be done remotely), and up to 80-95% of what was previously done with the help of an operator can now be done independently. But there is another 5% when you need qualified advice or specialist advice when you need to solve a complex problem. Perhaps you are going to invest in buying a hotel in Cyprus and you need to discuss this investment with a financial advisor, you need to meet a person face to face.
Universities will work in a similar way. Most of what we do there, we can do with the help of a computer: attend lectures remotely, as is happening right now, participate in seminars. But in the learning process, 5-10% falls on the solution of complex problems, when it is necessary to gather in a small group of experts and discuss the situation. Universities, of course, in 10 years will look different from what they are today, I promise you that.
Who will benefit from the new unique benefits? Kjell believes that those companies that can adopt implicit knowledge will become new temporary monopolies.
Temporary monopolies have been known for a long time. The IKEA company has managed to become the main seller of furniture in all countries of its presence, and people first of all remember about it when they need a new sofa. For a long time, Volvo cars were the only ones that guaranteed almost absolute safety, and thanks to this unique quality, the company has managed to achieve a unique position in the market. Pfizer, which invented Viagra, has become the market leader in specialty medicines.
Such examples will appear in the very near future. But the new “temporary monopolies” will now be those companies that best understand the practical, still unresolved problems of a potential client and will be able to use implicit knowledge to develop new products and services.
Video excerpt from Kjell Nordström’s speech
Video excerpt from Q&A session
A full video of Kjell’s performance is available at conference platform until February 1, 2021. You will need to fill out a simple form for registration and in the section “Library of IT-knowledge” by filter “Recording of Speakers’ Speeches / October 21. Plenary ”choose the speaker’s name.