The question “What are you going to be?” is usually put to secondary school students. Now, everyone will have to answer it: Requirements set for employees’ skills are changing dishearteningly quickly.
Are you sure your competences will allow you to retain your competitive edge in the future? If so, I think I will be able to change your mind. Now, you are going to invest your time, and I hope it will be a profitable, long-term investment. We are going to look at the trends and global challenges that make up the economy of the future (you would do well to take these basic premises as areas for your future development) and learn what can be done to move into that very future.
What approach do today’s consultants and coaches use for choosing a development area for you? When asked what, where, and how one should learn, they answer using a simple extrapolation: They superimpose global trends on the current situation and say that informatization and digitalization are going full tilt, so study IT or get a degree in engineering. But the time for such ‘fast food’ is gone, and this simplification no longer works. It does not allow you to elaborate an effective strategy. Markets are changing so rapidly that no agile methodology will help you adapt rapidly enough. Today, companies are forced to hire personnel that might allow them to retain their competitive edge in the future. We have to do the guesswork for the companies (they are concerned with other problems) and determine the sources of competitive advantages in future markets; then we should backtrack to understand the competences that will be in demand.
In fact, the future is not guessed at, it is shaped. Your approach to your skills should not be directed from the present into the future: I know how to do something, so I will be able to do that even better. Supposing I run a pigeon message service; I want to become better, so I create genetically modified pigeons that do not get tired, I work out the best routes, I use new materials to make lighter rings for holding the messages; then suddenly, the telegraph appears. Many rather smart people made disastrous mistakes in their prognostications. In the late 19th century, Western Union did not believe in telephones; in 1943, the head of IBM said that the global demand for computers was five units; only 40 years ago, presidents of IT companies were amazed that people wanted home computers; and, in 2004, Bill Gates promised to resolve the spam problem in two years.
You cannot guess the future with 100% certainty, even if you are a world-class analyst. Of course, there are exceptions. Last year, the Russian Internet was abuzz about a series of Soviet futuristic drawings from the 1960s. For instance, a child puts a note into a smart machine, and the machine is now cooking dinner for the child. Yes, they guessed correctly about the food processor. Or the mother puts a video call through to her son. Engineers had already calculated the possibility of Skype. And then there are pictures that are from more than a hundred years ago – researchers from 1900 were looking into the future. I love looking at these pictures time and again. A robotic housemaid – and now we have robotic vacuum cleaners. The Matrix did not exist yet, but students dreamed of having information uploaded straight into their brains. What is important is that futurologists of the past always focused all the processes they envisioned on the human being. Now, the human being as a system manager has been thrown a colossal challenge. You do not directly operate a smart road or a smart house or a drone. But if you can become a smart systems engineer, you will have a competitive edge.
So, why have these smart people made so many blunders in guessing the future?
To start with, they underestimated the rate of technological progress. We keep making this mistake: For some reason, we think that technologies are separated from us by some sort of glass cage. We think that technologies are far away, and then, suddenly, if you do not have the latest version of Microsoft Office, you no longer belong within the system; then, suddenly, if you do not have a chip, you cannot cross the road; then, suddenly, if you do not have clothes made of innovative materials, you are not allowed to go anywhere; and then, suddenly, if you cannot program in Python, you cannot send your CV to a halfway decent place. Today, checking potential candidates’ social network pages is standard procedure and if a candidate does not have such pages, potential employers become suspicious: How can you hire a person with unknown hobbies, lifestyle, and travel destinations? It seems ridiculous until it affects you personally. So, do not deceive yourself that technologies permeate our lives gradually and develop in a linear manner. Their development is rapid and unexpected; do not reject fantastical things, but always verify them. If I tell you that, soon, we will have a ‘brain–computer’ interface and Mindbook instead of Facebook, you will smile. But read the news and you will learn that Zuckerberg has invested a couple billion in developing Brainbook.
The second mistake is underestimating demand. In the early 20th century, Mercedes-Benz said that the car market would grow to 5,000 cars at the most; otherwise, there would not be enough drivers. Today, we do not need drivers anymore, and it is unclear where to find employment for truckers and for ourselves, too, because robotization will affect intellectual processes as well. I recommend taking it as an imperative that, over the next 10 years, at least half the competences and knowledge you have (and that I have, too) will become superfluous. If you accept this, things will become much easier, and you will be able to learn, to learn and learn again. In many developed countries, people aged 60 and 70 are taking additional training courses and courses that aid in adapting to current technological changes; this is, again, a standard procedure. So, relax, but do not make mistakes.
Look at Facebook’s capitalization. Tesla’s capitalization is greater than that of General Motors. Keep track of the companies that are getting ahead and do not make mistakes of the third kind: Do not think that the ecosystem means nothing. The ecosystem is crucial. Call it soft skills, digital skills, but, if you follow technological changes closely, take into account changes in society, demand, consumer patterns, and, if you understand that you yourself form your own ecosystem, there is a chance you will retain your competitive edge.
Everybody is talking about trends, but very few take a comprehensive look at them. For instance, people responsible for environmental development get together to discuss global warming. Yet, they do not touch upon the economic consequences that will affect a company’s productivity and profitability: For instance, the climate is becoming slightly warmer, oil wells are flooded, but new areas emerge for agriculture. Geopolitics also influence the economy. Has anyone heard the word ‘sanctions’? Why did we have to wait for geopolitical changes before we began working on import substitution and on developing the sciences in Russia? This is a standard part of strategy; people have been talking about it for ages. Inconsistencies lead to non-systemic solutions. And I have started by saying that you do not have the right to make non-systemic and unbalanced decisions. For you, the picture of trends is not a threat, it is an opportunity.
For instance, we did foresight for a company working in the nuclear power industry. They asked where we might be moving with our opportunities. Like people in the oil industry, they have become very good at managing complex facilities. Imagine: Hundreds of thousands of complex facilities at each plant, and they have to be linked into a system. For them, this skill is something they take for granted. The new economy, meanwhile, has a specific trend: smartization. Smart networks, smart refrigerators that stop people eating at night, smart roads. The main problem here is the algorithms that compute all that. This is management of a very complex system. Today’s assessments say that five million units are connected daily to the Internet of Things, but who is going to be the engineer behind all this abundance, the programmer in the broadest sense? Those who can manage complex systems; and this skill is acquired, among others, at raw materials companies that would seem to be receding into the past.
We created iFORA, a system for the smart analysis of big data, and we have accumulated scientific information there. If scientists suddenly start quoting their colleagues working in particular areas, it means breakthroughs are possible precisely in those areas. Here are the main trends.
Each of these circles – and there are 15,000 of them – represents a class of trends, or dynamic research fronts. I have highlighted perovskites – they increase solar panel efficiency. See the sharp spike in publications on the subject? This is one small area, but it allows for a breakthrough into the future.
Unfortunately, foresight is so popular today that even an insect repellent is called Foresight. This is a powerful tool, but it must be used properly. Essentially, it is a scientifically grounded methodology connected to shaping the future on the basis of global challenges (the outside frame), your capacities (the inner frame), and the interests of key stakeholders, (i.e., those who can influence the successful achievement of your goal). If you accept this definition, then each time you plan, you need to go over all your stakeholders and involve them in your foresight from the start. Speaking about national foresight – science, universities, society, the state, regions – there will be no country if we fail to involve them. Your personal foresight is your friends, family, colleagues.
Expert evaluation methods alone are not enough for good foresight; it should also involve modeling.When people talk about modeling, they say “garbage in, garbage out”: The more precise your model, the more sensitive it is to the information you enter, and this is why methods connected to macroeconomic prognostication often fail to give the desired results. People think inside the box, they use classification systems that include, for instance, OKVED (Russian National Industry Classification), the information services sector, but do not include Pokémon or augmented reality. If they are not in the classification, they do not exist. For good foresight, you need to use all available methods: expert evaluation methods checked against modeling, creative approaches, etc. The key factor is ensuring their interaction. When we were developing the prognosis for the development of the Russian Federation up to 2030, we used over 10 methods; we drew on big data; we involved over 2,000 experts. Various methods compensated for one another’s drawbacks, so we achieved scientifically grounded results.
In our prognosis, we singled out over 1,000 technologies that make up the economy of the future. Our prognosis is based on several premises. The first is the transition to a new technological paradigm. This is not just 3D-printers or smart systems; it involves far more complex technological processes. Our entire current economy is an economy of scale: the more you produce, the cheaper each individual unit is. That no longer works. The industrial Internet, smart systems: This is a new industrial revolution that is radically transforming the system for generating added value. Everybody has heard about Uber, and this is just the beginning. When you have platform technologies that enter many sectors horizontally, the consumer and the manufacturer are connected directly, via an interface.
We are moving from the knowledge economy to an action economy. And actions must be quick, efficient, and, most importantly, adaptive. Demand is no longer certain, everything is personalized, and one has to know how to generate added value in this new world. Areas of demand that did not exist 20 to 30 years ago have burst into our life: functional nutrition, for instance. A financially reliable, active demand was found, and products just flowed in. And people merely realized that health costs money. Any basic premises can help you find your future niches.
The economy has conditional constant factors, those that can be somewhat disregarded when production volumes are stable. Today, a great number of factors are ceasing to be conditional constants and becoming variables, yet many companies have not yet fully integrated them into their decision-making processes.
The environment? We are paying something, and that is fine, yet the fact that it is capable of changing marginality is not thus far taken into account. Consumer behavior? If we pay marketing specialists extra, they will sell anyone anything. None of that works anymore, and new optimization requires that you understand how robotization will go with you, especially if we are talking about procedures that demand a creative approach, so-called designing beyond the intuitive limits of the general designer. If you do not change your competences, you will all be replaced. Teachers and faculty will become outdated, too, at least those who are just walking textbooks. Yet, teachers who are mentors, who inspire, teach, help – those teachers will stay. Universities will change, too; they will combine at least three functions: fundamental research, education, and business (start-ups, spinoffs, etc.). A good professor should be doing research, looking into what is happening on the market, and translating this understanding into the educational process – only then will a ‘think tank’ emerge. You know that major companies have virtually stopped looking at people’s diplomas: Who cares about that? The question is, what courses have you taken recently? Not by chance have I called my talk ‘a dynamic portfolio’; you do not just receive knowledge, you pick and collect it; you construct your own portfolio like a Lego set.
Today’s research tells us that we will change our area of work two to three times in our lives. How do we retain our competitive edge?
The professions of journalist, doctor, and teacher are eternal (at least it seems so now); what changes is the requirements for their sets of competences. Doctors not trained in using augmented reality will have trouble performing surgery using augmented reality. You are a designer – are you sure you will not be replaced by slightly smarter programs? Ask this question more often: Can I be replaced or not? Consider your competences dynamically, starting with prognostications, and form the idea of what steps need to be taken, what competences must be mastered to be competitive on the markets that emerge in the future.
Many sectors of the Russian economy, including the agro-industrial complex, have already passed the bifurcation point; the changes have already begun. Our country has many structures, and such points will come in cascades, in waves that will wash over us, one after another – a social wave, an economic wave, etc. It is very important that the population be stable and have a competitive edge in order to be surfers and not divers among those waves. Going against these technologies is pointless. We must use them; we must become complex systems engineers in the broadest sense, including our own complex system.
The article is based on Alexander Chulok’s lecture “Mega-Trends: A Look at the Dynamic Portfolios of Competences of the Future” delivered in April 2017 as part of the project “University Open to the City: Lectures by Higher School of Economics’ young scientists in the ZIL Cultural Centre”.
