June 7, 2016

A caveman's guide to surviving in a digitalized world

Technology and the possibilities it creates are changing the world at an unprecedented pace and in ways that were unimaginable just a couple decades ago. At the same, we as people have pretty much the same basic needs as Neanderthals, with all the same joy and fear that comes along with those needs. What will happen to us cavemen in an increasingly digitalized world?

Imagine a future where food is bought from a metro station terminal using just a fingerprint. A future where unmanned busses, metros and trains transport commuters to homes where prepared meals are delivered to them by robot helicopters. A wallet has been reduced to a symbol on a smartphone touch screen—its original physical equivalent as unknown to future 20-somethings as fax machines are to contemporary 20-somethings. Your customer loyalty programs and payment methods are linked to your biometrics—no more plastic cards, coins or bills that can get wet in the rain, lost or stolen. I guess wallet making is one of many moribund professions thanks to digitalization.

According to even conservative estimates, around 5 million jobs may be eliminated by digitalization globally by the end of 2020. There will surely be financial booms in the future, as there have always been before, but digitalizing production will not create new jobs at the same rate as previous financial booms. These disappearing jobs may not necessarily be blue-collar jobs; white-collar office positions will vanish as well. 

One Oxford University study suggests the effects of digitalization will be even more severe. The study claims that half of all professions in the USA are in danger of becoming extinct in the next five years because of digitalization. The most at-risk professions are disproportionately those that were previously thought to be the most secure: information analysts and financial professionals. 

Machine learning and face and voice recognition software are developing rapidly. Meanwhile, the technology required for digitalization is becoming cheaper. These developments make computers more attractive substitutes for humans even in customer service professions. Humans are no longer needed to verify customer identification, and smart software can provide sufficiently trustworthy advice in sectors like financial services—and at the complete convenience of customers.

On the other hand, 65% of today’s students will be working in jobs that have not yet been invented. Overall pension contributions are continuing to shrink on a national economy level. The competition for jobs has never been more fierce. It is very likely that future generations will be unable to match the average incomes of previous generations when cost of living is taken into consideration. Accordingly, ownership is becoming less important; it is the use of products and services that matters. We pay for what we need and actually use, not just for possessing something. The cost-to-benefit ratio often indicates it is less sustainable and fiscally unwise to own. We may even become unable to afford the high rates of consumption we indulge in today. Cleantech Finland has predicted that we are going to need 50% more food, 45% more energy and 30% more water by the year 2030 if global population growth trends continue. Clearly, this is unsustainable. It is impossible to consume as we do today without irreversibly destroying our natural resources.

How do cavemen adapt?

Those who are familiar with change management and leadership know that big crises, such as burning platforms, are the best (albeit painful) way to change. This kind of crisis is sudden and unpredictable, much like divorce, death and layoffs are. Post-war generations are retiring, and working-age individuals are earning less than is required to support Nordic welfare systems. This is not a sudden crisis. This has been common knowledge for decades. On the other hand, my generation may consider our parent’s inheritance money as having an financial safety net. Even though our statutory pension provision might be smaller than those of previous generations, we still have a substantial safety net available. The cavemen of my generation do not have to adapt to digitalization for financial reasons. Well, at least not yet.

The other known driver of change is a sense of urgency. The Industrial Revolution took 60 to 80 years to happen at the turn of 18th and 19th century. How can there be a sense of urgency if the digitalization “revolution” might take decades? How can there be a sense of urgency when many of us believe that they will “get out of the way and retire” when change hits hard? The caveman in us might still believe that we do not need to adapt. It is still quite warm in our analog caves, after all.

Let’s get out of our comfort zones!

It is part of basic human nature to seek sanctuary in the familiar and safe. And this is difficult to change. The unknown naturally causes fear, so we reject it. This is a built-in function that helps us survive unknown threats. In cavemen times, failure in the face of these mysterious dangers could mean death. Nordic folklore is also full of sayings suggesting that even a small side step can result to road to ruin and that it is better to be safe than sorry.

In the digitalizing world those who carefully seek safety and comfort are ironically in danger of being left behind. In a fast moving world, the ones who succeed are the ones who have the courage to resist the natural fears in each of us. In the context of digitalization projects, this means taking brave steps and aspiring to goals that are technically impossible today. In the financial industry, the biggest renewal projects can take many years to accomplish, and through those project, technology can develop in leaps. If these projects are intended to use only existing technology, then when the project is finally done, the services will already be obsolete. For individuals and businesses, the best survival tactic is to face the changing environment directly, to bravely be a forerunner and remember that visionary, pioneering innovations are impossible without some struggle.

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