The power to innovate is falling into the hands of hyper-talented individuals.
Traditionally, the largest and most successful corporations were also the largest employers. Manufacturing and retail businesses required factories, warehouses, logistics and plenty of manpower, all working in harmony to deliver their product or service. Building this capability took years, requiring significant capital investments. Thus, competitors were few and far between, and disruption was painfully slow to make a dent on existing hierarchies.
But with the rise of technology, the model of success has gradually evolved, with businesses requiring fewer and fewer resources and employees to make an impact. Whatsapp is the perfect example; already worth $19bn with only 55 employees. And as we enter the next wave of tech innovation, we’ll increasingly see power transfer away from traditional ‘corporations’ and fall into the hands of smaller groups of highly skilled and hyper-talented individuals.
More, but increasingly complex opportunities
There has never been a more exciting time to be an entrepreneur, with emerging technologies bringing an unprecedented number of opportunities for innovation across platforms and software, with minimal physical resources and infrastructure required. We’re only now beginning to understand the potential of tools such as AI, machine learning, AR, VR, and the Internet of Things, and how they can be combined to create breakthroughs across a whole range of industries and problems.
Yet, identifying and then maximizing these complex and increasingly technical opportunities requires equally specialist knowledge and skills, along with the ability to respond rapidly to new innovations and competition. Understanding and manipulating the most cutting-edge tools requires the best brains, not to mention the drive, resilience and vision to identify the ideas with the most potential. The barriers to entry are rising, placing the power in the hands of those highly capable individuals, who are no longer reliant on building large organizations or physical assets to realize their ambitions.
Size doesn’t equal power
Corporations have always struggled to innovate, lacking the natural agility and flexibility of smaller organizations. However, as we enter this new age of innovation, it is becoming even tougher for the incumbents to keep up with the pace of change and increasing complexity, even with all their manpower and their abundance of cash lying dormant on the balance sheet.
What these big businesses are lacking is the ability to harness the power of the most talented individuals, by providing an environment where they can thrive. Radical change needs mavericks and risk takers who in turn need the freedom and ability to innovate; not be put in a straight-jacket and told to behave and operate according to corporate rules. The most extreme innovators don’t fit into old-fashioned, archaic organizational structures, which means it’s very difficult for big businesses to attract, integrate and retain these individuals.
Investing in these most cutting-edge technologies is also extremely risky, and corporations are too afraid of making mistakes and too busy covering their backs to take a serious punt on ideas that might not build any value. Innovation requires agility and radical thinking, which is impossible in an environment that is paralyzed by politics, an aversion to change and worries of cannibalising its existing revenue streams and product lines. Their only real hopes are spin-offs, joint ventures and acquisitions of the most talented individuals – not in-house innovation.
Supporting the individual
Those who succeed in the next wave of innovation will be those individuals and small teams with the technical skills and a ‘knack’ for understanding the end vision, along with the freedom and agility to explore the unknown. But to have this freedom, these individuals must be adequately supported with resources, networks and capital to take the necessary risks and follow their instincts.
Elon Musk thinks we’re all probably trapped in a “Matrix”-like pseudo existence.
The universe is 13.8 billion years old, so any civilizations that may have arisen throughout the cosmos have had loads and loads of time to hone their technological know-how, the SpaceX founder and CEO explained early this morning (Sept. 7) during a long, wide-ranging and very entertaining appearance on comedian Joe Rogan’s popular podcast, “The Joe Rogan Experience.”
“If you assume any rate of improvement at all, then games will be indistinguishable from reality, or civilization will end. One of those two things will occur,” Musk said. “Therefore, we are most likely in a simulation, because we exist.” [13 Ways to Hunt Intelligent Aliens]
“I think most likely — this is just about probability — there are many, many simulations,” he added. “You might as well call them reality, or you could call them multiverse.”
The “substrate” on which these simulations are running, whatever it may be, is probably quite boring, at least compared to the simulations themselves, Musk further told Rogan.
“Why would you make a simulation that’s boring? You’d make a simulation that’s way more interesting than base reality,” Musk said, citing the video games and movies that humanity makes, which are “distillation[s] of what’s interesting about life.”
The billionaire entrepreneur is far from alone in this interpretation; a number of physicists, cosmologists and philosophers find the simulation hypothesis compelling. If even one advanced alien civilization with a predilection for creating simulations has ever arisen out there, the reasoning goes, then it could theoretically pop off thousands — or perhaps even millions or billions — of “fake” universes. And it would be hard for the inhabitants of these digital realms to figure out the truth, because all the evidence they could gather would likely be planted by the creators.
Indeed, the simulation idea is one of many possible explanations for the famous Fermi paradox, which basically asks, “Where is everybody?” (“Everybody” being aliens, of course.)
70 Percent Of Consumers Will Be Grocery Shopping Online By 2024
You now have a chance to try Kroger’s self-driving grocery delivery… if you happen to live in the right part of Arizona.
You now have a chance to try Kroger’s self-driving grocery delivery… if you happen to live in the right part of Arizona. The chain has launched its driverless delivery pilot at a single Fry’s Food Stores location in Scottsdale, giving you a chance to receive foodstuffs courtesy of Nuro’s autonomous vehicles. Order through the Fry’s website or app and the robotic courier can deliver either the same day or next day for a $6 flat fee. You’ll have to live in the same 85257 ZIP code, so you can’t make them drive across town just to satisfy your curiosity.
Sadly, you won’t see Nuro’s custom R1 vehicle (above) roll up to your home in the earliest stages of the pilot — it’ll be a modified Toyota Prius instead, and the very first phase will include a just-in-case driver. The purpose-built machines will only start delivering your goods sometime in the fall, after they’ve completed certification and testing.
This isn’t the first self-driving grocery test in the state, as Waymo and Walmart are trialing pick-ups in Phoenix. This is, however, the first real chance many will have for driverless delivery. Just don’t expect to see this service spread far and wide for a while. Autonomous car companies have gravitated toward Arizona both due to its support for truly driverless testing as well as its warm climate and relatively sparse population. You won’t see mass adoption until completely driverless cars are both legal in more states and know how to handle snow, ultra-dense traffic and similar hazards.
We’re a long way from the HAL-9000 (thankfully), but NASA is considering a bigger role for high-end computers in deep-space missions, such as a journey to Mars. To prepare, the International Space Station has been hosting a system built by Hewlett Packard Enterprise (HPE) for the past 11 months. The initial findings, according to HPE: It works without major glitches.
The system, an Apollo 4000-series enterprise server, is considered a “supercomputer” because it can perform 1 trillion calculations per second (one teraflop). That’s not so rare nowadays, but it’s way more computing power than NASA has had in space. Those resources can do complex analysis on large amounts of data that aren’t practical to beam back to Earth.
The key aspect of this test was to see if a standard, off-the-shelf computer could survive the abuse of life in space–especially radiation exposure–using only software modifications.
The computer will get a full evaluation when it returns to Earth later this year, but HPE says it’s already learned three valuable lessons:
Software can protect a system: The Apollo 4000 constantly monitored the performance of key components for possible effects from radiation. Whenever one operated out of parameters, the system hunkered down in idle mode, and then did a full health check before resuming.
You can’t count on the internet: HPE’s software was written assuming near-constant internet access, which is not the reality in space. HPE is considering modifications not just for spaceborne systems but for any running in remote locations. Read More
While there has been a lot of discussion about “what’s left for humans?” as AI improves at exponential rates — the customary answer is that humans need to focus on the things they are uniquely good at, such as creativity, intuition, and personal empathy — I think we now have to ask, “what’s left for firms?”
In many ways this is an old question, because it takes us back to the arguments of Nobel Laureates Ronald Coase and Oliver Williamson that firms exist to coordinate complex forms of economic activity in an efficient way. If computer technology has the capacity to simplify and streamline transaction costs, more and more work can be done through these smart-contract arrangements, making traditional human-managed firms obsolete. For example, when you say to Alexa “order more dog food,” a chain of activities is initiated that leads to the delivery of a fresh supply of Kibble 24 hours later, with little or no human intervention. This work is coordinated by a single firm, Amazon, but it often involves third parties (makers of dog food, delivery companies) whose systems interact seamlessly with Amazon’s.
But is this coordination logic, this ability to internalize transactions to make them more efficient, really the raison d’etre of firms? I would argue that it is just one among many reasons that firms exist. And as computer technology simplifies and reduces transaction costs further, it is these other things that firms do uniquely well that will come more to the forefront. Here are four areas where firms excel.
1. Firms create value by managing tensions between competing priorities.
In today’s parlance, firms have to exploit their established sources of advantage (to make profits today) while also exploring for new sources of advantage (to ensure their long-term viability). However, getting the right balance between these two sets of activities is tricky because each one is to a large degree self-reinforcing. Hence the notion of organizational ambidexterity — the capacity to balance exploitation and exploration.
Artificial intelligence is evidently helping many firms to exploit their existing sources of advantage — whether through process automation, improved problem-solving or quality assurance. Artificial intelligence can also be useful in exploring new sources of advantage: in the famous case of AlphaGo, the winning “strategy” was one that no human player had ever come up with; and computers are increasingly writing new musical scores and painting Picasso-like landscapes.
But AI is not helpful in managing the tension between these activities, i.e. knowing when to do more of one or the other. Such choices require careful judgment — weighing up qualitative and quantitative factors, being sensitive to context, or bringing emotional or intuitive factors into play. These are the capabilities that lie at the heart of organizational ambidexterity and I don’t believe AI can help us with them at all right now. IBM’s recently-announced Project Debater is a case in point: it showed just how far AI has come in terms of constructing and articulating a point of view, but equally how much better humans are at balancing different points of view.
2. Firms create value by taking a long-term perspective.
As a variant of the first point, firms don’t just manage trade-offs between exploitation and exploration on a day to day basis, they also manage trade-offs over time. My former colleagues Sumantra Ghoshal and Peter Moran wrote a landmark paper arguing that, unlike markets, firms deliberately take resources away from their short-term best use, in order to give themselves the chance to create even more value over the long term. This “one step back, two steps forward” logic manifests itself in many ways — risky R&D projects, pursuing sustainability goals, paying above-market wages to improve loyalty, and so on. We actually take it for granted that firms will do many of these things, but again they involve judgments that AI is ill equipped to help us with. AI can devise seemingly-cunning strategies that look prescient (remember AlphaGo) but only when the rules of the game are pre-determined and stable.
An example: the “Innovator’s Dilemma” is that by the time it’s clear an invasive technology is going to disrupt an incumbent firm’s business model, it’s too late to respond effectively. The incumbent therefore needs to invest in the invasive technology before it is definitively needed. Successful firms, in other words, need to be prepared to commit to new technologies in periods of ambiguity, and to have a “willingness to be misunderstood,” in Jeff Bezos’s terms. This isn’t an easy concept for AI to get used to.
3. Firms create value through purpose — a moral or spiritual call to action.
There is a second dimension to long-term thinking, and that is its impact on individual and team motivation. We typically use the term purpose here, to describe what Ratan Tata calls a “moral or spiritual call to action” that leads people to put in discretionary effort — to work long hours, and to bring their passion and creativity to the workplace.
This notion that a firm has a social quality — a purpose or identity — that goes beyond its economic raison d’etre is well established in the literature, from March and Simon through to Kogut and Zander. But it still arouses suspicion among those who think of the firm as a nexus of contracts, and who believe that people are motivated largely through extrinsic rewards.
My view is that you just need to look at charities, open source software movements, and many other not-for-profit organizations to realize that many people actually work harder when money is not involved. And it is the capacity of a leader to articulate a sense of purpose, in a way that creates emotional resonance with followers, that is uniquely human.
Successful firms, in other words, institutionalize a sense of identity and purpose that attracts employees and customers. Ironically, even though blockchain technology is — by definition — about building a system that cannot be hacked, or misused by a few opportunists, people still prefer to put their faith in other people.
4. Firms create value by nurturing “unreasonable” behavior.
There are many famous cases of mavericks who succeeded by challenging the rules, such as Steve Jobs, Elon Musk, and Richard Branson. With apologies to George Bernard Shaw, I think of these people as unreasonable — they seek to adapt the world to their view, rather than learn to fit in. And if we want to see progress, to move beyond what is already known and proven, we need more of these types of people in our firms.
Unreasonableness is antithetical to the world of AI. Computers work either through sophisticated algorithms or by inference from prior data, and in both cases the capacity to make an entirely out-of-the-box leap doesn’t exist. Consider the case of investment management, where robo advisors are not just making trades, they are also providing investment advice to investors, and at a fraction of the cost of human financial advisors. But as the Financial Times said last year, “when it comes to investing, human stupidity beats AI.” In other words, if you want to beat the market, you need to be a contrarian — you need to make investments that go against the perceived wisdom at the time, and you need to accept the risk that your judgment or your timing might be wrong. Both qualities that — at the moment — are distinctively human.
So one of the distinctive qualities of firms is that they nurture this type of unreasonable behavior. Of course, many firms do their best to drive out variance, by using tight control systems and punishing failure. My argument is that as AI becomes more influential, though the automation of basic activities and simple contracts, it becomes even more important for firms to push in the other direction — to nurture unorthodox thinking, encourage experimentation, and tolerate failure.
In a recent Fast Company article, Vitalik Buterin described how all the elements of Uber’s ride-sharing service could be provided through Ethereum-based applications that worked seamlessly with one another: “the whole process is basically as before, but without the middleman [Uber].” This is may be true, but it doesn’t necessarily follow that a computer-mediated service is the better option.
You might not have to splurge on a Pixelbook if you’re pining after a Chromebook with Windows 10 support. XDA-Developers has learnedthrough source code that Campfire, the feature that would let Chrome OS dual-boot Windows 10, would be available in multiple “variants” — that is, on more than one Chrome OS device. This wouldn’t mean that any and all Google-powered PCs would have the option. Hardware makers would have to verify that Windows worked properly, and it’d be out of the question for the many Chrome machines that only have a small amount of flash storage. Recent code comments suggest you’d need at least 40GB of space, and many Chromebooks have 32GB or less.
The good news: you might not need to jump through hoops to turn it on. You wouldn’t need to enable Developer Mode (and thus compromise your PC’s security) or flash your firmware. There are also hints that you could use a simple command to invoke the new mode.