Page 102 - The EDIT | Q2 2017

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Thoughtleader
that — if they are to stay relevant and successful in the coming years — will have to understand what business they are in. More specifically, they will have to adapt to and capitalise on technology as it emerges around them.
Transport and Automobiles, and the rise of the autonomous connected car
Gartner analysts predict that by 2020 there will be 20.8 billion things connected to the Internet. That’s three connected devices for every person on the planet. Many of those will be cars. Our cars are already part of the internet of things, it’s just that we’re in the early days and we haven’t relinquished much control over to them yet — but it’s inevitable that this will change.
The biggest shift that car manufacturers will have to navigate will of course be the development of the autonomous or self-driving car. Estimates vary but most converge on a timeline of around 2020 or shortly after... by then, commercially available self- driving cars will appear on the streets of our towns and cities.
This will enable huge advances in how we get around. For example, Anthony Barrs and Baiyu Chen — two graduate students at the University
of California, Berkeley — have devised a plan for tightly-packed clusters of autonomous vehicles to be virtually connected, enabling them to speed past local traffic at speeds of more than 100mph, all on existing roadways. Called Hyperlane, it works just like high-speed toll lanes do now — the difference is that a central computer will control everything1.
1
https://www.theguardian.com/technology/2017/jun/03/self-driving-cars-high- speed-lane-berkeley-california
The other huge implication for car manufacturers will be that once cars can drive themselves, will we necessarily want to own one? Cars are expensive to maintain, they depreciate in value, and, most of the time, we’re not even using them. The case for subscribing to access a car rather than owning one outright is a compelling one.
Think of cars like music. Before, we used to own music. We had favourite artists and we paid to buy physical copies of that music so we could listen to them whenever we wanted. Then someone invented a way to access any music whenever we wanted, and suddenly owning music didn’t seem like such a good idea. Now we just subscribe to a music service and get access to whatever artist or track we want to listen to, whenever we want.
Think of music like cars. Before, we used to own
cars. We had favourite car brands and we paid to buy physical copies of those cars so we could drive them whenever we wanted. Then someone invented a way to access any cars whenever we wanted, and suddenly owning cars didn’t seem like such a good idea. Now we just subscribe to a car service and get access to whatever brand or model we want to drive, whenever we want.
The lesson of Levitt’s rail roads is right there for
car manufacturers. Most of them are not in the car business, they’re in the transportation business. And in the transportation category your competitive set isn’t just other car manufacturers, it’s Google, Apple and Uber. All car manufacturers understand this — but the trick will be restructuring their business and marketing efforts so that they are ready for when the tipping point comes.
Finance, and the impact of blockchain and VPFAs
The financial category will also undergo huge change in the next 5-10 years. Much of it will be underpinned by a technology called blockchain. If you don’t know what blockchain is or haven’t heard of it, look it up and learn more. It’s the technology that underpins something you will have heard of — Bitcoin.
Essentially blockchain is a distributed database that is used to maintain a continuously growing list of records, called blocks. Because each block
THE EDIT ISSUE 06 | Q2 2017