CREATIVE DESTRUCTION defines future tech. Think Amazon vs Sears. The business model of retail work associates serving customers in shopping malls is being displaced by smart phones and artificial intelligence (AI) devices like Amazon’s Alexa. Amazon ends up hiring thousands of new work associates while traditional retailers like Macy’s close stores. Amazon’s stock price has grown 400% over the last five years while Macy’s is considering selling the business.
This creative destruction process defines our economic future. But it raises this question:
How to survive, or even thrive, in a future tech economy of simultaneous value destruction and value creation?
Future tech’s lower costs are killing off Industrial Age companies and jobs
Future tech’s ability to win on cost is ending the Industrial Age. AI, the Internet of Things (IoT), solar and batteries are combining to win a price war against coal, gasoline and natural gas. Human manual labor is being displaced by lower cost smart machines.
For example, companies like Dupont and GM earn hundreds of millions of dollars annually from zero waste manufacturing facilities. California is pioneering Zero Net Energy buildings that use a combination of AI, IoT, LED lights, mesh connectivity, solar and batteries to slash or eliminate electric bills.
In five years autonomous vehicles will be a reality seen on our streets and highways. The reason will be lower cost. Estimates are that an autonomous riding sharing car service will cost 1/10th of a human driven ride sharing service.
- >Reducing labor costs. The average long haul trucker earns $40,000 per year. Fewer truckers will be needed. It will also reduce the historical truck driver shortages.
- Reducing accidents from driver distraction or fatigue. 90% of truck accidents are caused by human error. Also smart trucks will “talk” to one another to avoid collisions.
- Increasing continuous hours of vehicle service</li>
- Increasing vehicle productivity.
AI, mesh connectivity and autonomous vehicles will enable curb to curb mobility. Similar to how cloud services has displaced buying software, vehicle ownership will become a costly luxury compared to buying mobility as a service.
Most urban autonomous vehicles will be electric because they cost less to fuel and operate. The global growth in electric car use, lead by China, is projected to reduce oil demand by 2 million barrels of oil per day by 2020. The last time this happened the price of oil dropped from $100 per barrel to $25 per barrel. This sent oil company stock prices falling while six of America’s eight largest oil producing states remain in an economic recession from this price drop.
Future tech will make recharging an electric car cheaper than filling up a gas tank. Utility scale solar power plants now generates electricity for 3 cents per kWh. That is less than the generating costs of coal and natural gas power plants. This holds the potential of pushing the electric utility industry over a financial cliff if their coal and natural gas plants become worthless because they cannot compete on price.
Virtual reality (VR) tech is now emerging. It will massively change how people work together. VR removes the need for humans to physically meet. It replaces the conference room with a digital three dimensional environment. Think that sounds like years away? Ford is already designing cars and holding meetings using VR tech. This has slashed Ford’s product development time while also reducing transpiration costs.
Future tech’s ability to cut costs and increase productivity is ending the Industrial Age.
Uniting America around future tech
This the economic reality that every American (and American company) must come to accept:
Future tech will win on price and productivity.
But future tech’s economic victory will be costly. Jobs will be lost. Families and communities threatened. Future tech has the potential of dividing America between those who benefit and those left behind.
Here are three steps America should take immediately that to ensure future tech leadership while so making future tech work for all Americans:
- Teach machine learning from 1st grade through college. Learning to work with smart machines is what learning English was during the Industrial Age. It is core to future work. It must become a core educational curriculum.
- Massively fund future tech job training. Training Americans to work in future tech is the only path for preserving jobs and human dignity. It will insure America’s global tech leadership. This should be America’s top funded economic growth program.
- Align government policy and taxes with future tech. Future tech is not just an American issue. China and Germany are pursuing future tech leadership. Who wins future tech leadership will determine military and economic leadership. Government policies (Federal, state and local) that enable future tech innovations is required to maintain America’s economic and military super power status.
About the author
Bill Roth is a clean tech pioneer who led the team that launched the first hydrogen fueled Prius. He is a featured contributor on Triple Pundit and Latin Business Today. His book, The Secret Green Sauce, has been used by thousands of business people to implement proven green best practices that make money and a difference. Bill’s latest book, The Boomer Generation Diet, is his personal story on how to achieve sustained weight loss while still having fun and living more. The book’s ten customizable best practices are the sustainable solutions to our national weight crisis that threatens our health and medical cost bankruptcy.