Digital Transformation: Preparing for the Future (Part 1)

Alec Ross (@AlecJRoss) is a digital transformation expert and author of The New York Times bestseller: The Industries of the Future.

As former Senior Adviser for Innovation to the Secretary of State, Ross’s commentary on innovation is shaping the conversation on digital transformation, the future of work, and innovation hot spots that will drive the digital future.

In this must-read interview, Ross offers a sobering look at the public policy and corporate-social responsibility considerations that will separate winners from losers in 2019 and beyond.

Hope you enjoy the conversation.

Appian: You’ve written a lot about the challenges of navigating the promise and peril of digital transformation. One of the things you warn about in your book is that our children aren’t being prepared for tomorrow’s economy. What did you mean by that?

Ross: So, I think generally we’re doing too little to prepare today’s young people for tomorrow’s world—in part because we’re effectively delivering the same education that we were delivering after World War II.

But the entire world has transitioned from a predominantly industrial-based economy to a knowledge-based economy. And our education system simply doesn’t reflect that.

If you look at states and societies that have made the transition, you see them adapting more effectively than what’s happening in the U.S. So, I’d really start with education.  I really think that we need to make sure that the outputs of our educational system maps to the inputs of where future jobs will be. And it’s not the same kind of education that was delivered in the classrooms back in the 1940s, 50s and 60s.

Mapping education to future jobs

Appian: So, what steps should we be taking to upgrade our education system?

Ross: This isn’t overly complicated. First of all, in a world where artificial intelligence is enabling labor substitution that isn’t merely manual and routine, but increasingly cognitive and non-routine, we need to drive interdisciplinary learning that simply doesn’t exist in most K-12 education systems.

We also have to make sure that our non-college educated workers are getting the kinds of apprenticeships and technical training they need for the jobs of the future. We ought not to have an economy where you have lots of knowledge workers doing very high-end work, lots of people working at minimum wage jobs, and then a very thin middle.

So, in our education system, we should be taking steps right now to address what’s turning into a significant labor gap in terms of technical skills and trades.

Appian: As you think about the future, what trends do you see shaping work and jobs? And what will the industries of the future look like?

Ross: So, first of all, I’d do some overall framing and say that land was the raw material of the agricultural age. Iron was the raw material of the industrial age. Data is the raw material of today’s and tomorrow’s economy. The people who controlled land during the agricultural age, had the power. During the industrial age, the people who controlled the factories and access to natural resources had the power.

In the digital economy, the people who control the data or do the best job of harvesting it, will create the businesses and industries of the future. So, I think the raw material of the economy has changed, which informs overall trends in business and the economy.

Data drives digital transformation

Appian: So, how does the importance of data manifest itself?

Ross: Well, first, I’d look at the degree to which we have a data-rich economy, and our ability to harvest meaning from that data. I do a lot of work with Johns Hopkins University, and they’re associated with the life sciences.

And what’s interesting to me when I think about what’s next in the life sciences, is that it has less to do with innovation in surgery, and less to do with what humans are doing, and more to do with what machines are doing for humans.

Appian: Is that what excites you about the advances we’re seeing in genomics?

Ross: I’m thinking specifically about genomics. Our ability to harvest data from the 20,000 to 25,000 genes in our bodies is remarkable. And similarly, whether it’s agriculture, mining, transportation, I think the shift into business models where data is the raw material, I think that that is the most powerful trend to watch.

Appian: Speaking of trends, in “The Industries of the Future” you talk about the technologies and industries that will drive the next stage of globalization. What’s the biggest takeaway for business and IT leaders?

AI makes human attributes more valuable

Ross: There are a couple. First, I’d say that the future offers both promise and peril. And my view of the future is not Utopian. It’s not that the world is going to be Star Trek. But it’s also not dystopian—the world is not going to be Mad Max either.

The next 10 years are going to offer promise and peril. And how you navigate that will determine whether you’re going to be in better or worse shape in 10 years. That’s thing one.

Thing two is, that in a world of increasingly powerful artificial intelligence—machine learning and robotics—the attributes that make us most human will grow ever more important.

Appian: Can you give examples of the kinds of attributes you’re talking about?

Ross: So, skills that don’t lend themselves to automation will become increasingly important in the workplace. This includes emotional intelligence. We also have to cultivate creativity and some of the collaborative skills that you can’t outsource or code as zeros and ones.

The third thing I’d point to is that innovation is not just going to come from one or two hot spots. Much of the world’s wealth that’s been created in the last 10 years has come from a small area in California called Silicon Valley, and from a spot up in Washington state that’s home to Amazon and Microsoft.

Innovation hot spots of the digital future

Appian: How will that change in the future? Where will the new innovation hot spots be in the future?

Ross: When we think about the industries of the future, I think that there will be 10 to 12 alpha cities—these will be metropolitan areas around the world where there will be substantial amounts of innovation, commercialization and the job and wealth creation that goes with that.

There will also be 30 to 40 Beta metros—places that may not have the highest concentration of corporate headquarters, but nevertheless will be part of global supply chains, and where there will also be high concentrations of knowledge workers working in the industries of the future.

(Stay tuned for the final episode of this 2-part series, which was originally published July 16, 2018)

 

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