THE GOLDEN AGE OF INNOVATION

“I am everywhere” – Lucy

Mark J. Barrenechea
OpenText CEO and CTO
 Barrenechea, Mark J.

THE GOLDEN AGE OF INNOVATION

First Printing, February 2017

Printed in Canada
First Edition

ISBN
978-0-9936047-7-5

Published by
Open Text Corporation
275 Frank Tompa Drive
Waterloo, Ontario, Canada
N2L 0A1
(519) 888-7111
[email protected]
www.opentext.com

Certain statements in this book may contain words considered forward-looking

statements or information under applicable securities laws. These statements are based
on OpenText’s current expectations, estimates, forecasts and projections about the
operating environment, economies and markets in which the company operates. These
statements are subject to important assumptions, risks and uncertainties that are difficult
to predict, and the actual outcome may be materially different. OpenText’s assumptions,
although considered reasonable by the company on the date of publishing, may prove
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 Mark J. Barrenechea

Mark J. Barrenechea serves as Chief Executive Officer (CEO) and Chief

Technology Officer (CTO) at OpenText (NASDAQ: OTEX, TSX: OTC), and
as a member of the board. He joined OpenText in January 2012. Under
Mr. Barrenechea’s direction, the company has grown both organically and
through strategic acquisitions into a $2B company. Through its commitment
to innovation and customer-centricity, OpenText has successfully realigned
its products to transform itself into a leader in the Enterprise Information
Management (EIM) market.

Before joining OpenText, Mr. Barrenechea was President and CEO of Silicon
Graphics International Corporation (SGI), where he also served as a member of
the board. During his time at SGI, he led the company’s strategy and execution.
Prior to SGI, Mr. Barrenechea served as Executive Vice President and CTO
for CA, Inc. (CA), (formerly Computer Associates International, Inc.) and as a
member of the executive management team. Mr. Barrenechea was also Senior
Vice President of Applications Development at Oracle Corporation, responsible
for managing a multi-thousand member global team. He has also held a
number of other positions, including Vice President of Development at Scopus, a
software applications company, and Vice President of Development at Tesseract,
where he was responsible for reshaping the company’s line of human capital
management software.

Mr. Barrenechea holds a Bachelor of Science degree in Computer Science from

Saint Michael’s College. He currently serves as a member of the Board and Audit
Committee of Dick’s Sporting Goods. He also serves as a member of the Board
of Hamilton Insurance.

Mr. Barrenechea has authored several books about the evolution of the
enterprise software industry, including: On Digital, Digital: Disrupt or Die,
e-Government or Out of Government, Enterprise Information Management:
The Next Generation of Enterprise Software, eBusiness or Out of Business,
and Software Rules: How the Next Generation of Enterprise Applications Will
Increase Strategic Effectiveness.
 ACKNOWLEDGEMENTS

The content of The Golden Age of Innovation is inspired by

the work of OpenText employees, customers, and its leadership
team. I am simply the scribe, attempting to tell their story
as unbiased as I am capable of being. Let me provide a
specific acknowledgement to the World Economic Forum
for championing the discussion on Digital, its impact on our
world, and for shaping the definition of the Fourth Industrial
Revolution. The Golden Age of Innovation is also inspired by
their work. Klaus Schwab, the founder and Executive Chairman
of the World Economic Forum, has taken a leadership role in
this. I would also like to acknowledge Fredrik Härén for his
thinking on “ideas,” “the impossible,” and “Angry Birds.” And
without fail, for always contributing and shaping OpenText,
CMO, Adam Howatson, and my Program Office, including
Nicolas Heldmann and Scott Schultz. My PMO provides
endless support.
We Choose to Go to the Moon!

“We set sail on this new sea because there is new knowledge
to be gained, and new rights to be won, and they must be won
and used for the progress of all people. For space science, like
nuclear science and all technology, has no conscience of its own
[well, not so fast!]. Whether it will become a force for good or
ill depends on man, ... I do not say that we should or will go
unprotected against the hostile misuse of space any more than
we go unprotected against the hostile use of land or sea, but I do
say that space can be explored and mastered without feeding the
fires of war, without repeating the mistakes that man has made
in extending his writ around this globe of ours.

We choose to go to the Moon! … We choose to go to the Moon

in this decade and do the other things, not because they are
easy, but because they are hard; because that goal will serve
to organize and measure the best of our energies and skills,
because that challenge is one that we are willing to accept, one
we are unwilling to postpone, and one we intend to win …”

— John F. Kennedy,
Rice University, Houston, Texas,
September 12, 1962
 CONTENTS

1. I s t he M icrophone Work i n g ? . . . . . . . . . . . . . . . . . .. . . . . . . . .1

2 . Revolut ions . I ndust r ial or O t her w i se. . . . . . . . . . . . . . .5

3. T he Fou r t h I ndust r ia l Revolu t ion . . . . . . . . . . . . . . . . . .11

4. The I mpac t on Busi ness . . . . . .. . . .. . . . . . . . . . . . . . . . . . . . . .15

5. New Busi ne ss Model s Eme rge . . . . . . . . . . . . . . . . . . . . . . . .19

6. I ndust r ies are Tr a n s for me d . . . . . . . . . . . . . . . . . .. . . . . . . . . 23

7. New S k i l l s are Req u i re d . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

8. T he R i se of t he Mach i ne . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . 33

9. The I mpac t on t he Per son . . . . . . . . . . .. . . . . . . . . . . . . . . . . . 39

10 . T h e D i g i t a l S e l f . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . .45

11. The I mpac t on G over n ment . . . . . . . . . . . . . . .. . . . . . . . . . . . 51

12 . How Wi l l We Measu re t he G olden A ge ? . . . . . . . . . .55

 1

Is the Microphone Working?

Testing, one, two, three. Testing, one, two three. Can you hear
me? Is the microphone working? Testing (tapping on the mic
a few times).

By all accounts, we are entering the Golden Age of

Innovation, which many are calling the Fourth Industrial
Revolution. This seems like a very appropriate label as we will
explore in this book.

Some of the early innovations of the Fourth Industrial

Revolution are visible in consumer and personal use cases,
such as gaming, shopping, and entertainment. But the
vast majority of these innovations—like software, Artificial
Intelligence (AI), medicine, robotics, and transportation—have
yet to impact society or productivity. When they do, their
effects will be exponential and staggering.

Right now, we are in the midst of a technology boom. Over

the last decade, the top 20 U.S. technology firms have created
over $1 trillion USD in value. U.S. venture investment topped
$60 billion USD in 2016.1 Software is now contributing
over $1 trillion USD in Gross Domestic Product (GDP) to
the global economy.2 And there are 4.5 million professional
software developers in North America alone—more than
ever before.3

Innovation drives progress. Software and hardware innovation

accounts for nearly 15% of all R&D, pharmaceuticals for
almost 10%.4 In 2015, U.S. patent applications hit a record
high, topping over 600,000.5 Half of the world’s best-known
brands are now platform companies.

2
We all need to be software companies. The ability to innovate
at scale needs to transcend nations, cultures, and people.
Many cultures find it difficult to innovate. My experience
suggests there are three key ingredients to innovation: access
to talent, access to capital, and an entrepreneurial spirit.

All industries will be transformed over the next 10 to 20 years

by technology. These transformations will vastly impact us as
individuals, as a society, as businesses and governments, and
will change how we live, work, govern, keep the peace, and
wage wars. We will explore this in coming chapters.

But what will be the ultimate measure of this transformation:

is it profit, peace, quality of life, or a new form of conscious
capitalism? The Organization for Economic Co-operation
and Development (OECD) Better Life Index ranks Norway,
Australia, Denmark, Switzerland, Canada, Sweden, New
Zealand, Finland, United States, and Iceland as the top 10
countries for wellbeing.6

The United States would rank in the top three if not for:
community, civic engagement, and work-life balance. I am
not one to lecture on work-life balance. But democracy is
not easy, and the great American experiment has invested
deeply in a government of, by, and for the people, yet only
50% of eligible American citizens vote or experience civic
engagement.7 This is shameful. In regards to community,
despite progress over the last 100 years, 15% of Americans
still live in poverty, which is completely unacceptable.8

3
My grandfather was born before planes, cars, televisions,
telephones, and electricity were commonplace. He lived for 98
years (smoked for 60 of those and ate bacon and eggs every
morning). He also worked on his farm every day until he
passed, and left America only once to sail across the Atlantic
to France to join the Allied Liberation Forces in WWI. There
were many phenomenal aspects to my grandfather, but let
me highlight the incredible human spirit of adaptability that
led him to transition from horses to planes, from whale oil
to electricity, from dirt roads to a nationwide transportation
network. He also lived to see the first personal computer, and
his grandson earn a computer science degree.

As a software engineer, I have never seen a more gilded time

to positively impact society and humanity through technology.

This is the Golden Age of Innovation: And so begins

the Fourth Industrial Revolution and our individual
responsibilities for creating a better future.

Testing, one, two, three. Is the microphone loud enough?

4
 2

Revolutions. Industrial or Otherwise.

The Fourth Industrial Revolution (4IR) changes everything.
Although it has many names—Industry 4.0, Digitalization,
the Singularity, the Internet of Things (IoT), Connected
World, Smart Home, Cognitive, etc.—it will be known as the
Fourth Industrial Revolution, or 4IR. And it will be driven
by vast technology advancements in software, analytics, AI,
machine learning, quantum advances in hardware, robotics,
material science, 3-D printing, medicine, connectivity, and
transportation. The Fourth Industrial Revolution will change
the nature of wealth, health and happiness, how we live,
work, relate to one another, as well as how governments
engage, regulate, serve, and protect.

By 2025, 50% of the world’s GDP will be derived from

digital (a process that is completely automated by machines,
which does not require human intervention).9 This will have
profound implications.

The First Industrial Revolution (1750 – 1840) was powered by

water and steam to mechanize production. Inventions such as
the steam engine, iron working, textiles, cement, and railroads
terraformed our landscape as humans migrated from rural
(agrarian) to urban (city) settings in massive population shifts.
Language and reading skills increased with the printing
press and so our civilization advanced. Great libraries of
the world were built and opened to the public. Revolutions
ensued in America and France with Napoleon conquering
most of Europe. The very fabric of society changed. Voltaire,
Paine, and Rousseau agreed that society should be organized
according to rules based on rational thought rather than

6
religious ideology. Indeed, most western advances are based
on rational thought, behavior, and market dynamics. This is
changing in our time.

The Second Industrial Revolution (1840 – 1969) was

driven by electronic power to create mass production
and predicated inventions such as the car, the plane, the
television, the telephone, the submarine, the typewriter,
and even the hydrogen bomb. It was the great age of iron,
steel, rail, electrification, petroleum, chemicals, engines,
telecommunications, and modern business management. It
demonstrated the greatest increase in economic growth in
the shortest period ever, introduced by mass production and
modern manufacturing. The foundations of globalization
were laid and great western populations rose up out of
poverty while many deadly commonplace diseases, such as
measles, mumps, polio and more, were eradicated. Civil war
defined America, Germany rose to power, and two world wars
were fought.

The Third Industrial Revolution (1969 – 2000) was enabled

by Information Technology to automate production. Inventions
included the integrated circuit, the personal computer,
smartphones, the Internet, space exploration technologies, and
the laser. In 1988, Kodak had 170,000 employees and sold
85% of the world’s paper. Within a few years, their business
model disappeared and they went bankrupt.10 Yes, digital
technologies replaced film, but what Kodak failed to realize
was the disruptive force around them, its opportunities,
and the appropriate investment in them (thus, the defining

7
“Kodak Moment”). In the year 2000, the Third Industrial
Revolution gave way to the Fourth, which ushered in great
technological advancements, along with wage stagnation and
income inequality.

The Fourth Industrial Revolution (2000 – present) not only

digitizes production, but also “intelligence-based tasks,”
which previously could only be handled by the human mind.
This revolution is of a scope, scale, velocity, and complexity
unlike anything else we have faced. Its effects will impact
all of humankind, all industries, all countries, every facet
of every glorious element of our society—revolutionizing
business models, reshaping the world, and even redefining
our very existence. As Kennedy observed in his famous
“We choose to go to the Moon” speech, the technological
opportunities presented by this revolution will be unlimited
and challenging, having the power to create and the power to
destroy; and as we say in Vermont, any fool can burn down
a barn.

The Cretaceous-Paleogene extinction event (i.e., the meteor

that wiped out the dinosaurs) decimated some 75% of the
plant and animal species on Earth. The last ice age only
ended about 10,000 years ago, and you can still travel the
Moraine line today (which I have done from California to New
York). Extinction events happen. Present possible extinction
events include meteor, nuclear, climate change, and some
now add sentient machines and the Singularity—or the point
at which a machine can think and act at or beyond human
capability (thereby rendering us redundant)—to this list.

8
The vast majority of this book will highlight the power to
create inherent in the 4IR as the Golden Age of Innovation,
but it is important to note the perils that are equally present.

9
 3

The Fourth Industrial Revolution

What makes the 4IR different from the Third Industrial
Revolution (3IR)? Well, everything.

It is marked by exponential thinking where linear solutions no

longer apply. The digital version replaces the analog version.
Knowledge and invention are cumulative. Evolution is just the
re-encoding of information, after all. Every person, culture,
industry, and country is affected. All forms of production,
management, systems, and governments will be transformed.

The opportunities are unlimited: faster prototyping and

time-to-market with 3-D printing and production, conquering
disease and illness with nanotechnology, micro-financing
using robo-advisors and advanced algorithms, more efficient
and affordable connected homes, safer and more convenient
travel with autonomous vehicles. Not to mention other
improvements made in human longevity, energy, material
sciences, entertainment, consumerism—the list goes on and
on. All of these advances will be predicated by developments
made in AI, machine learning, algorithms, massively large
data sets, and robotics.

But as the opportunities flourish, so will the perils: identity

theft, cyber-crime, espionage, new definitions of conflict
and war, de-humanization, a widening of the digital divide,
automation anxiety, radicalization, propagandizing. Last year,
my identity was stolen and I only discovered this because
the Internal Revenue Service (IRS) rejected my tax return
saying that I had already filed. Sixteen months later, I am still
dealing with the aftereffects.

12
The 4IR is delineated from the 3IR by three main concepts:
extreme connectivity, extreme computing power, and
extreme automation.

Extreme Connectivity: Cell phones currently connect

almost 5 billion people.11 By 2025, this number will be 6
billion.12 Today, a smartphone costs $150 USD a month. By
2025, it will cost $150 USD a year.13 Further, it is easy to
follow the curve to attaining 1 trillion connected devices
(machines) over the Internet (cars, phones, homes, machinery,
airplanes, trucks, ships, soda machines, etc.). Six billion
connected people, 1 trillion connected machines—this is
extreme connectivity.

Extreme Computing Power: Today, you can rent almost

endless processing power from Microsoft Azure or Amazon’s
AWS. Enter quantum computing and the Qubit. Quantum
computing will become a reality in the 4IR. Humans can no
longer beat a computer at chess. The world’s Go champion
is also a computer; the alpha male is replaced by Google’s
AlphaGo.14 This is nothing compared to the capabilities of
quantum computing and the Qubit. Quantum computing
has already reached 128 Qubits of processing capacity for a
single system. At 1024 Qubits of quantum processing power,
all the world’s traditional encryption codes can be unlocked by
a machine in near real time. All doors are instantly opened,
from banks, to vaults, to personal accounts, to weapons
systems. It would be a world without doors and locks. This is
extreme computing power.

13
Extreme Automation: With extreme connectivity and
extreme computing power, the exponential opportunities for
automation are revealed (truths are revealed, never created):
cognitive, AI, machine learning, 3-D printing (prosthetics,
cloths, and machine parts), algorithms, and methods at
hyper-scale. Five billion Google searches a day,15 200 million
daily orders on Alibaba,16 and 2 billion worldwide Facebook
subscribers.17 Automation will drive cars, cure cancer,
replace entire labor pools, reduce underwriting risk, fight
wars, and entertain us. Ultimately, it will create a new class
of sentient beings with artificial consciousness. This is
extreme automation.

14
 4

The Impact on Business

The 4IR is presently servicing new market needs while
simultaneously disturbing existing products and services. New
business models and value chains are emerging, and in some
cases, supply and demand cycles are being slammed together
to become one.

In almost all cases, new entrants have an advantage over

incumbents. New entrants have vast access to capital, have no
legacy infrastructure to transition into the future, innovate at
the speed of thought and without political or organizational
boundaries, and investors are more interested in grabbing
subscribers and market share than generating profits in the
early years of the 4IR.

Even more important than all of this is the ability to

conceptualize in the 4IR, perhaps because the new inventors
are borne of an age with a maniacal focus on the customer
experience, transparency of their services, and a reinvention of
how products and services are conceived, designed, delivered,
marketed, sold, and supported.

Business leaders need to transform their thinking along

fundamental lines to break synchronous orbit and achieve
exponential thinking. How do we deliver solutions that
are more customer-centric, faster, at greater scale, and are
disruptive and thus provide higher barriers to entry?

16
In the 4IR, I see a new business codex:
ŸŸIt is more important to be fast than perfect
ŸŸWe need less data and more insight
ŸŸConduct less planning, and encourage more
experimentation (and at scale)
ŸŸBe customer-led, versus merely customer aware
ŸŸTalent, in many cases, is more important than capital
ŸŸThe skills of critical thinking and creativity are more
important than interpersonal and organizational skills
ŸŸInnovation is real time, iterative, and not a linear waterfall
ŸŸExperiment at hyper-scale
ŸŸIt is one world; build one company
ŸŸDo for machines what we did for humans

There is a new latticework for the 4IR.

17
 5

New Business Models Emerge

New business models have emerged in the 4IR that
distinguish themselves from “the way business was
conducted” in the 3IR. A common theme that has
been applied to these new methods is disruption. Let us
look beyond disruption and consider the distinguishing
characteristics of these new models:

From Analog to Digital: This is perhaps the most obvious.

Every analog version of a product or service has a digital
version. The quest to eliminate every piece of paper often
requires the rethinking of a process. It could be the “Kodak
Moment,” the elimination of the wallet and cash, removing
a lockbox process, challenging a title process, redefining
intellectual property, or going wireless with headphones.
Challenge every analog process or product you have, even the
very notion of being human.

From Partners to Disintermediation: One of the

distinguishing elements in the 4IR is disintermediation,
or the removal of the middle person or partner, going
direct, direct to the customer, buyer or supplier. We see
disintermediation occurring in all industries. Direct in retail.
Direct in software. Direct in insurance. The ownership of the
customer or consumer is a new battleground for trust, brand,
and share of wallet. If the intermediary does not add value, it
will be destroyed.

From Transactional to Subscription Economy: In the 3IR

we purchased products or services to own them. In the 4IR,
we will subscribe to products or services. This will change
relationships and processes from one time to recurring.
20
Customers and consumers will desire more agility and
flexibility. But do the math. There are breakeven models of
owning versus renting. I find the answer to many of life’s
questions is 42 (as in The Hitchhikers Guide to the Galaxy
by Douglas Adams). In the case of owning versus renting, the
breakeven point is usually 42 months. After 42 months, you
are better to own.

From Me to We: The Sharing Economy: The sharing

economy, as it is called, is all about asset utilization. How
do I utilize non-working labor or an idle car? Uber. How do
I utilize an unoccupied room or house? Airbnb. How do I
utilize programmers with available time? Code sourcing. How
do I utilize the collective energy of a group of individuals?
Crowdsourcing. And so on.

These new business models are rooted at the nexus of the

extreme changes in technology (connectivity, computing
power, and automation) and a generational or societal change.
Millennials are changing the way we do business. Millennials
are not shackled to tradition or location, they do not believe
in the value of face time, they are impatient learners and seek
immediacy, they prefer to learn through experiences, and they
believe in life, not a work-life balance.

Technology reflects life. This drives innovation, such as on-

demand, public SaaS, Cloud, a sharing economy, subscription
services, and disintermediation. After all, you can run your
life today only using one finger on an iPad.

21
 6

Industries are Transformed

Every industry will be transformed by new technologies,
a new workforce (Millennials), new business models, new
supply/demand chains, new value chains, and new buyer
expectations. Over the next 10 to 20 years, this will come to
fruition due to extreme connectivity, extreme automation, and
extreme computing power.

At the end of the day, all businesses will become software

and analytics companies. Uber, after all, is just software; they
do not own any cars or have many employees, yet they are
becoming the world’s largest logistics company. Bitcoin is just
software called cryptocurrency. Money will soon be software
too—in fact, most of it already is.

In 2001, in my book eBusiness or Out of Business, I wrote

“you banish software, you banish the world.” Let us consider
how software will transform a number of industries over the
next 10 to 20 years:

Financial Services and Banking: The wallet will go away

and be replaced by your phone. Cash will also be eliminated.
Processing will be instant for account creation, credit, and
money transfer. In 1990, 90% of all NASDAQ volume was
driven by humans. By 2025, 95% of all NASDAQ volume
will be driven by machines. A handful of algorithmic trading
firms will capture the vast majority of equity value creation—
after all, it will be a zero-sum game and the person with the
largest computer will win.

24
Automotive: Self-driving cars will appear on the road
and the automotive industry will be disrupted. Automated
cars will be summoned using your phone, show up at your
location, and drive you to your desired destination. Parking
will be coordinated by software and cameras. You will pay
only for the distance traveled and be productive in the
process. With autonomous cars, will our children even need a
driver’s license? Cities will be transformed as cars are reduced
by 75%. Car accidents will drop by 90%, saving millions of
lives each year. The engineers at Daimler, VW, and Audi are
already reeling at the advances being made with driverless
and electric cars by Tesla, Google, and Apple. Traditional car
companies as we know them today will disappear. Each car
will be powered by over 150 million lines of software code,
more than is currently required by Windows Vista, Google
Chrome, the Mars Curiosity Rover, or an F-22 Raptor. Did I
mention cars will be electric?

Insurance: The average age of an insurance agent in the

U.S. is 59 years old.18 Agents will be replaced with direct
relationships between customers and insurance companies
as they fortify their franchises. Data companies will emerge
that have a digital sequence of the person or a property,
eliminating the need for applications or consumer-supplied
information. Algorithms in massive computer farms will be
applied to instantly measure risk profile, underwriting needs,
and the required premium for each specific policy. As cars
become autonomous, accident rates will plummet and the car
insurance market will disappear. The day of digital reckoning
is quickly approaching for the unprepared insurer as extreme
25
computing, online data, and mobility reach critical mass.
Know the person or the property (or its digital sequence), and
you know the risk.

Agriculture: Enter the agricultural robot, or agbot. Agbots

will bring efficiencies and benefits to agriculture, eliminating
physical, back-breaking tasks with everything from lettuce
bots to wine bots and even the modern-day Marlborough
Man as drones herd cattle. When the price of an agbot falls
below $1,000 USD, farmers will transition from working in
their fields to working as managers of their fields. In many
ways, this is still analog thinking; in the future, we may not
even need livestock farms. Agbots will change the world and
the future of food production by optimizing land use and
eliminating a dependency on livestock. Nearly 60% of all
ag-lands are used for beef production.19 A single cow takes
up nearly two acres20 of land and 441 gallons of water21 for
one pound of beef. That same cow produces the methane
equivalent of four tons of carbon dioxide a year22 (a significant
percentage of all greenhouse gases). The need for beef will be
diminished by innovative approaches like substituting insect
protein for meat or in-vitro (synthetic) meats designed to taste
like grade-A5 Kobe beef. Are you ready for your veal created
in a petri dish?

26
Legal: Law school graduate unemployment has hit a record
high. What was once a future-proof degree will see 80%
of its work eliminated by supercomputers. Within seconds,
computers will be able to produce legal advice with 90%
accuracy compared to 75% human accuracy. Though perhaps
there will always be a need for human specialists.

Retail: I liken transformation in this industry to an iceberg,

with 20% visible above the surface, and 80% hidden from
view, below the surface. There are the must do’s above the
surface for extreme automation of operations, customer-
centricity, omni-channel experiences, two-hour delivery, and
technology augmentation for every sport, for every age (from
team scheduling to fantasy sports to golf-swing analysis). The
transformative technology is 3-D printing. Take a high-
scan image of your head and get a custom helmet. Take a
high-scan image of your hand and get a custom glove. Take
a high-scan image of your foot and get the perfect athletic
footwear. When raw materials, suppliers, supply chains,
distribution, and logistics are all transformed, the end result
will be perfect, bespoke, high-performance products for the
consumer. A China-based company is 3-D printing homes.
They can print 10 homes a day at a cost of $5,000 USD
per home.23

Energy and Electricity: Renewables win. Electricity will

become cheap and clean. We are now installing more solar
energy than fossil fuel-based systems. The price of solar will
drop so much that it will force coal companies out of business.

27
In 2014, Ontario, Canada eliminated coal production.24 With
cheap electricity comes cheap transportation and abundant
water. The average consumer could save $2,000 USD a year.25
Producing water from desalination will cost less than running
your toaster for a year. Water is not scarce, potable water is.
Imagine a world where potable water is abundant.

Healthcare: Big data will create cures for cancer, turning

clinical specialization (a single doctor’s knowledge through
experience) into globally available protocols. Nanotechnology
will change drug delivery and targeted therapy. The cyber-
knife will become widely available. Genome editing could
eliminate mutations and deliver enhanced humans (H+).
Three-dimensional printing will make prosthetics affordable
and liberating. Life expectancy now exceeds 80 years of age.26
Living to be 100 years old is well within reach.

Education: Billions will have access to the Internet and a

basic laptop and/or smartphone. Younger generations will
have access to education like never before, without even
leaving their homes. Education will become democratized,
despite threats from terrorist groups or governments
controlling or limiting access to education—especially for
young women. Gender will no longer be a roadblock to
access to education and educated young women will become
educated mothers, ensuring generational access to education.

28
 7

New Skills are Required

Over the last decade, we can say with confidence through
research and direct experience that much attention has been
applied to a handful of skills for the professional worker. This
is about the future of jobs, skills, and workforce strategy. To
date, emphasis has been placed on some key skills: people
management, coordinating with others, negotiating, and active
listening. These are all good skills, and in many ways, are
table stakes for a modern workforce.

But what skills will change the most and what is required for
the 4IR?

As we look to the future of jobs and the most important skills

required to succeed, these top three skills emerge: creativity,
critical thinking, and complex problem solving.

With new products, new technologies, and new ways to work,

both employees and employers will have to be more creative
to make businesses function cohesively. Disruption will drive
more critical thinking and new business models will require
more complex problem solving.

Think of a taxi driver. They require two skills: driving and

the ability to read a map. Both of these skills are being
replaced by self-driving cars and online map services. In
airports, you order your meals on an iPad. Grocery stores
have moved from self-service checkout to monitoring your
activity and just billing you.

30
I have always believed in this formula, and as time passes, I
become more convinced:

Killer Product = Function {Knowledge + Idea + Innovation}

Turning an idea into a killer product is insanely hard and the

success rate is abysmally low.

Turning an idea into a killer product is a function of

knowledge and innovation. Knowledge is the accumulation of
facts and information, with new methods applied: Innovation.
The plus (“+”) is the human, our talent pool, requiring new
skill sets in the 4IR.

Is Angry Birds (product) a function of cumulative knowledge

(Sesame Street characters) plus a new idea (a sling shot)
added to the innovation of mobile technologies? It may look
simple, but developing the concept is insanely hard.
27

Conventional thinking is a hurdle that must be overcome

to free up creativity for true innovation to happen. When I
travelled throughout Asia speaking about the 4IR and this
Golden Age of Innovation, Fredrik Härén gave a presentation
on ideas and the impossible. During this talk he asked
members of the audience to imagine achieving the impossible
and to write down their top three or four answers. His
findings were incredibly revealing.
31
The majority of people wrote down the same answers: flying,
walking on water, time travel, immortality, space travel,
world peace, the ability to teleport, invisibility, discovering a
cure for cancer, and proving the existence of God or even to
be godlike.

If we asked a child the same question, their answers would be

imaginative, limitless, and truly impossible: “I want to hold an
elephant in the palm of my hand.”

Products are a function of knowledge plus innovation. The

skill sets required for the future of work has changed.
Generation Xers need to redefine their thinking about what
is impossible.

32
 8

The Rise of the Machine

It is happening so fast it cannot be stopped. From Oxford to
MIT to Harvard to the World Economic Forum, they all say
the same thing: The 4IR will automate up to 47% of all jobs
in the U.S. over the next 20 years.28 This will motivate a labor
migration greater than that of the Great Depression. Even at
the lower end of this range, it will be a rude awakening in
what some call “a world without work.” I am a believer that it
will be a full-on technological revolution for robots, machines,
and cognitive systems (incorporating analytics, AI, and
machine learning).

Extreme connectivity, extreme computing power, and the new

economics of automation are driving the rise of the machine.

For an employer, the cost of an employee (including salary,

healthcare, and other benefits) can total $45,000 USD a year.

34
A robot can do exactly the same work for much less and be
more “reliable” in the process, requiring maintenance rather
than benefits (robots don’t take sick days). It can also produce
the same product or service at the same (or faster) rate in
exactly the same way, every time.

Jobs that are labor-intensive are at risk, especially when the

cost of a robot is significantly lower than a human salary.
The more human incomes increase and benefit costs soar, the
wider the crossover point grows, or if you will, the alligator
jaws widen. This is the economic argument, not the moral
one. The two arguments need to be solved, conjunctively.

Agbots will transform the way the world is fed.

Drones can do dangerous tasks, from building inspections to

putting out wildfires to monitoring borders.

Robots can explore our universe (there are now a total of six
robots and satellites exploring Mars).

Machine-to-machine communication is driving vast increases

in asset utilization and efficiency, more accurate information,
and greater safety. For example, by the end of 2020, there will
be approximately 53 million smart meters throughout the
U.K.29 Will it make sense, or even be feasible, for a human
to be dispatched four times a year to read and record the
information and hand this to another human only to be
correct 80% of the time?

35
Engine monitoring—planes, trains, and automobiles—is a
great advancement. Sensors in various locations can gather
information about the engine. Fuel consumption, engine
performance, irregularities, preventative maintenance, and
more—all of this information is sent in real time to the
operator for correction, or to machines for analysis, or to
ground crews to ensure parts and labor are immediately
available to get the asset performing again.

The same goes for robotic handling, welding, assembly,

dispensing, and processing. Over the last 10 years, the
prevalence of industrial robots in welding has grown by
nearly 100%.30 At the same time, U.S. manufacturing jobs
have fallen 15%.31 In the auto industry today, one robot is
employed for every 10 humans.32

Numbers are reaching critical mass. Researchers predict that

by 2025, Japan will have 1 million industrial robots installed33
and there will be more than 7 million unmanned aircraft (or
“civilian drones”) flying the U.S. skies.34 Over the next 10
years, there will be 60 million robots in the world.35 That’s
the equivalent of the entire U.K. population!

The rise of machines is real and reaching scale and the future
of employment is being redefined. The business, ethical, and
policy questions on how we treat a machine versus a human
need to enter public discourse. As machines get smarter, more
perceptive, better at manipulation, more creative and socially
intelligent, more jobs become vulnerable.

36
Here I am talking to a robot while checking in for a flight
from Tokyo to San Francisco. The robot was useless. I tried to
use one of those passport scanners and it could not read my
passport, so I ended up speaking to a human and printing
my ticket.

37
 9

The Impact on the Person

The “Physical” Self
The 4IR is expected to accelerate knowledge like never
before. As I mentioned previously, technology will
advance with artificial intelligence, resulting in medical
breakthroughs. As a leukemia survivor, I carry three DNA
sets and, thanks to a third-party donor, replaced my stem cell
production. I guess that makes me not a cyborg, but a chiborg
(chimerism + technology). (And yes, I just coined a new
term.) Medical advancements like these will redefine what it
means to be human. Nanotechnologies in the medical field
will drastically change how we deliver drugs, kill microbes,
repair cells, and perform surgery—all on a nano-scale that
is more targeted and more accurate than previous medical
methods and practices.

As a result of breakthrough technologies, life expectancy

should increase as we finally slow—or even reverse—the
effects of aging and decay at a cellular level. In addition,
body parts that have failed will be replaced with parts grown
from stem cells, cultivated and harvested by nanorobots or
with biomechatronic body parts, or perhaps even 3-D printed
organs. More humans will become cybernetic organisms
(cyborgs), like Motoko Kusanagi in Ghost in the Shell, a movie
in which much of humanity is connected to a vast electronic
network through cybernetic bodies (“shells”) which possess
their consciousness and give them superhuman abilities.

40
In addition to increasing life expectancy, technologies such
as genome editing will provide us with the tools for human
enhancement, including genetic engineering to produce
designer babies. Genome editing is also crucial to gene
therapy, or replacing defective genes or modifying immune
cells to fight diseases, such as HIV, Alzheimer’s, or cancerous
cells. As technology advances exponentially, so too must our
civil, moral, and spiritual motivations to accommodate and
adapt to the 4IR.

The 4IR will, therefore, change our fundamental

understanding of our physical selves—that we were born to
die naturally. The introduction of designer babies, cyborgs,
and veritable immortality will shift how we view our physical
self and how we fundamentally organize ourselves. Our
traditional concept of the family might cease to exist. The way
we appropriate resources might also shift as designer babies
have the potential to outsmart and outwork the now older, yet
stronger cyborg population that might not die.

Cogito ergo sum

Descartes’ famous assertion that “I think, therefore I am”
has guided modern western philosophy and ontology for
centuries. The notion of self is based on humankind’s ability
to think and acquire knowledge. This ontological concept of
the self will be challenged during the 4IR. Machine learning
and interconnectedness, along with the advancement of
AI, will eventually produce an intelligence that is sentient
and may potentially trigger the Singularity. A self-thinking
and self-improving machine would transcend our notion of
41
self because if a machine is self-thinking, does that make
it human or does it simply make it sentient? Would you
consider Dolores in Westworld to be human or merely a
sentient machine? If we were to consider these androids to
be humans, what changes would we need to make to our
society to accommodate these increasingly powerful and
smarter “humans”?

On the other hand, with the advance of cybernetics and a vast

network of connectedness, can humans also attain the same
level of knowledge as a sentient machine? Imagine again
Kusanagi in Ghost in the Shell, where her self inhabits a shell
and connects to everything. Is she still a human? Or would
transhumanism (H+) take over and advance the human race?

Humans could start to control machines through

synchronization to accomplish tasks no machine or human
could accomplish alone (like the large fighting machines
in Evangelion controlled by teenagers). Or maybe, humans
would possess so much knowledge that an omnipotent, Lucy-
like person could exist. Finally, humans could potentially tap
into our stardust memories to unlock the inner universe’s
power within us, like Akira did.

The 4IR will advance machine intelligence and sentience

while also ushering in transhumanism. Thinking will no
longer be sufficient in defining who we are.

42
Disappearance of the Self or Enhancement of
the Self ?
The 4IR will connect everything—all networks, all things, all
selves. Everything will have access to every datum, available
for access in real time. Robots with AI will roam among
humans. Humans will have cyborg bodies and their selves
digitally copied, stored, and continually backed up in multiple
locations, like the horcruxes of the Harry Potter universe.
Transhumanism will be a reality.

Will the notion of the self disappear, whether physically or

ontologically? If everyone is connected and doesn’t die, would
humans as a race be the only self that is left—a collective
self and mind? Would all humans merge into this self and
become a godlike creature, rivaled only by the equally
godlike AI?

Or will humans retain their individuality and personality,

remaining connected to others as an enhancement of their
own selves? The 4IR will not only accelerate technological
revolutions and knowledge acquisition, it will challenge
the most fundamental understanding of what it is to be
human and the notion of the self. Philosophers, ethicists,
and thinkers should not delay in addressing this issue,
because without a proper foundation of the notion of the
self, mass hysteria might ensue when humans can no longer
identify or distinguish themselves based on outdated notions
or characteristics.

43
 10

The Digital Self

Just as our analog notion of self (flesh and blood) consists
of RNA and DNA, our digital sequence—let us call it the
“Digital Self”—consists of code. Each day, we are creating
massive and permanent data trails that contain essential
attributes of encoding, decoding, and expressions of our
genes (or self). We do this both consciously and explicitly, and
subconsciously and indirectly.

Consider the behaviors that you produce every day, stored

permanently in “Digital Land”: your psychological profile,
your physical profile, your consciousness and belief profiles,
your emotions and character, and your net worth. Billions of
us have actually submitted our own definition of our Digital
Self into various social networking sites (name, address, age,
marital status, education, employment, friends, likes, dislikes,
political views, etc.). We volunteer this information!

Think of your gene expressions every day in Digital Land:

You search the web, you read ebooks, watch movies, post
videos, tweet, list your friends, order food, and complete
online transactions. Imagine storing rock solid patterns
of your behavior—sharing your movements via wearable
technology, updates to your medical records, bank records,
birth records, employment history, education, driving
information, purchase history, and online articles that you
read. It is all there, a complete record of your digital RNA,
DNA, and behaviors. Permanent, indefatigable, revealed
truths, one digital bread crumb at a time, uploaded to the
Cloud—sounds like heaven.

46
Now suck all this information into a computer, every minute
of every day. Run an algorithm against that data, and a digital
sequence of you is created. Perhaps multiple sequences are
created. You could use a CRISPR and have a super-digital
sequence of yourself. Then pump that into an artificial
intelligence or learning machine, and suddenly your Digital
Self is “alive.”

Science fiction or a revealing truth?

A friend recently told me a story where he received a call

from his granddaughter who was in jail. She was locked in
a cell, being treated poorly, and surrounded by threatening
cellmates. She needed a $2,500 USD wire transfer to post her
bail and get out of jail, but she wasn’t able to ask her parents
for help. This was her one call and it was being recorded by
the police, so she needed to keep it short. “Granddad, can you
help?” Of course he could! And he did. He wired the money,
but it turned out that the call was a scam.

The bad actor in this case reproduced a digital self of the

granddaughter, right down to the voice and behaviors,
and perpetrated the petty crime of stealing funds using
digital payments.

What does this mean for the person, for business, for
governments and society?

47
For the person, if we dismantle the notion of the self, the
societal, spiritual, and religious impacts are profound. Your
Digital Self lives on, ever collecting knowledge, and is in all
places at once. To quote the movie Lucy: “I am everywhere.”
We all become Brahma (the creator) and Shiva (the destroyer).

Facebook is buying data to “fill in the profiles” of their almost

2 billion subscribers; rounding out their digital selves without
the users’ explicit consent.36

For business, the Digital Self will be exploited to deliver

better ads, provide better recommendations, drive purchasing
decisions, and reduce risk. Consumer businesses will know
what you need before you even need it. A perfect and
persistent personal assistant.

Governments will be obliged to protect the rights of

our Digital Selves. Does the Digital Self become like a
corporation, thus serving as a new shareholder in the
definition of a Corporate Self?

Ultimately, one has to “opt in” to this new Digital Land, the
digerati, and leave the Flat Land, the land of the Luddites.
For those who opt out, can they function in society, or are
they a new super-culture or subculture?

The British television series Black Mirror features an episode

that addresses this notion of a Digital Self being created,
captured, and exploited. It is a modern-day Twilight Zone,
with sharp undertones of an expectant and emerging reality.

48
It is so much an emerging reality that it is already happening
in Shanghai with the recent release of the app, Honest
Shanghai. In an effort to make Shanghai a global city
of excellence, the government is using apps like Honest
Shanghai to reward residents for their honesty, morality,
and integrity. Using facial recognition software, the app
aggregates some 3,000 items of personal data collected by the
government—creating a digital copy of Shanghai residents—to
generate “public credit” scores that range from “very good”
to “good” to “bad” (imagine your government rating you).
Users with a higher score can reap the benefits in the form
of discounts, lower loan rates, better positions in lines, travel
discounts, and more—while those with a bad score may
have to deal with declined loan applications or inferior seats
on planes.

There goes a little honest graft.

We need to harness the transformative aspects of the 4IR to

change the world, and obsessively but thoughtfully conquer
the perils. For me, I am all in.

49
 11

The Impact on Government

“Good enough” as a measure for government work is no
longer good enough. The changing nature of the citizenry
(Millennials and subsequent generations) will massively raise
the bar for government.

Citizens want to engage with their governments. They want to

voice opinions, coordinate their activities, and in some cases,
circumnavigate their officials. Citizens want full transparency
and automated services. Why do we need to file a tax return?
If all of our transactions are digital, we should simply be
emailed a check or a bill. If the wallet disappears, will our
need for a passport, ID card, or a driver’s license persist? Or
will we be provided with a digital identity in the form of a
digital fingerprint or retina scanner?

The revolutionary wave in 2011 known as Arab Spring

highlighted the power of social media; the U.S. election of
2016 weaponized its capabilities.

Governments will have more data and massive controls over

people via their information and behaviors, obtained through
pervasive surveillance. Governments can also do good with
their data, and set agendas for Open Data, to unlock the value
of data sets to spur innovation and invention. Imagine the
emergence of educational institutions using the billion dollar
infrastructures of NASA and the Departments of Energy or
Agriculture to drive innovation.

It will be a battle over privacy and citizens must never relent

on the protection of their information. Data corrupts, absolute
data corrupts absolutely.

52
The very nature of conflict and war will be redefined in the
4IR. Mobilizing troops, engaging in gunfire, bombing power
plants, and blowing up dams will be replaced with hacking
systems and shutting down power grids. These will be the
new acts of war.

A new playbook will be required to counterbalance the black-

hats, to protect our way of life, and to ensure the analog
version of war is minimized and avoided.

Just as the rules of war will change, so too will governments.

They will need to conform to the theory of global governance
epitomized by transgovernmentalism (G+)—as administrators
of the collective good, purveyors of the ultimate surveillance
program (such as PRISM), and as power centers competing
with other governments. At the end of the day, governments
will need to re-think how they protect citizen workers in the
4IR as labor is displaced at scale.

53
 12

How Will We Measure the Golden Age?

“Let us not seek the Republican answer or the Democratic
answer, but the right answer. Let us not seek to fix the blame
for the past. Let us accept our own responsibility for the future.”

— John F. Kennedy

Industrial revolutions tend to benefit the rich more than the

poor, initially. They all begin with great inequality. In unequal
societies, life expectancies and trust levels are lowered. They
tend to be more violent, experience greater levels of mental
illness, and have higher rates of incarceration. In the U.S.,
one in 50 adults are on community supervision, probation, or
parole.37 One in 50!

As it stands today, the future is not evenly divided. The richest

1% of the population now owns 75% of all household wealth
and 8 individuals control more assets than the poorest 3.6
billion people combined—or half of the world’s population.38

The anxiety over automation, the growing digital divide, is

real, is present, and is the greatest moral question of our time.
Reports vary in their quantum, with some at the low end
(25%) and others at the high end (47%), but they all agree
that the human workforce of the future is shrinking as more
and more jobs are automated out of existence.39

This increasing anxiety, divide, and inequality will create

instability and security concerns for both citizens and
states—a general state of unrest. The unrest can manifest
itself from within—witness the BREXIT vote—or externally,
with bad state-sponsored actors. The transformation is real
and it will impact jobs and equality.
56
The strategic space for conflict is changing and new
battlegrounds are emerging. In the future, power plants will
not be bombed, they will be turned off. Leaders will not be
assassinated, they will be toppled by propaganda, data leaks,
and fake news. This has already happened in Iran with
Stuxnet40 when Hackers made Iran’s nuclear computers blast
AC/DC’s song Thunderstruck in the middle of the night, and
even with the 2016 United States Presidential election.

The 4IR also goes deeply into who we are as a people,

as a species, and speaks directly to our identity and
our communities.

Beyond the transformation of all industries, beyond the new

winners and losers and the creation of new “Kodak Moments,”
how will we measure our new Golden Age of Innovation?

I have a series of modest proposals:

Personal Responsibility: We each need to take personal

responsibility and be a driving force for positive change. We
choose and instigate our own actions and we each need to be
morally accountable, and thus, drive a common purpose of
humanity in our new world, one leader at a time.

Education: Education is a game-changer. It creates a happier

and more stable life, raises income levels, and creates more
equality. It has the power to create independence and turn
aspirations into a reality. A more educated world is more
tolerant, safer, peaceful, and surely, more economically
prosperous. Educational equality is a dual-track system,
supporting vocational and academic advancement, and
57
ultimately, equality. The world needs skilled electricians,
plumbers, roofers, carpenters as much as we need doctors,
programmers, and lawyers.

Youth Sports: I am a product of public education and youth

sports. Athletics have a positive, life-long impact. They instill
in children the value of teamwork, personal discipline and
healthy competition, and teach youths how to recover from
setbacks. Sports help children to develop their cognitive
and motor skills, provide positive influences and inspiration,
and keep kids out of trouble. There is no other activity that
affords the opportunity to impart so many positive qualities in
children. In the U.S., youth sport participation is declining.
Roughly 40% of American youth participates in a regular
team sport.41 There is a direct correlation between youth
sport participants and a more productive future, so we must
increase participation to ensure a better future.

Technology Everywhere: Technology needs to find its way

into the poorest communities and countries. Getting fees for
a smartphone and rural connectivity down to $150 USD a
year is still too expensive. For many, this represents a large
portion of their annual income. A billion smartphones in
underdeveloped regions like Africa would raise not just a
community or a country, it would carry the entire continent
into the 4IR.

58
Raising Humanity Out of Poverty: Enough with technology
driving my car, having a “Like” button, or delivering a
real-time movie—these comforts are meaningless when you
consider that much of the world is still living in poverty.
Circa 1800, 95% of the world lived in poverty. Today, 50% of
the world still lives in poverty.42 Fifty percent!!! While many
view this as an improvement, I believe we can do better.
The greatest injustice in this world is poverty. There is no
structural reason why we cannot radically change the world—
and technology can be the enabler for this.

Our Age of Innovation will be truly golden if we can raise the

world’s citizens above the poverty line in our lifetimes and
perfect conscious capitalism.

Testing, one, two, three. Is this microphone working? Can you

hear me?

59
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