Business futurist Patrick Schwerdtfeger closed the Governance, Risk, and Control Conference with his keynote address, "Embracing Disruptive Innovation." Schwerdtfeger, whose technology expertise includes artificial intelligence, fintech, and blockchain, dissected the topic of business disruption and explained how attendees could spot potential threats and opportunities in their organizations.
Schwerdtfeger began with an illustration of the rapid growth of data, pointing to research from Amazon showing that, in 2000, the cost of storing one terabyte of data was $17,000 — by 2020, Amazon says, that price will have dropped to $3. In tandem, data processing and data bandwidth also have accelerated by leaps and bounds. And with Big Data, all of this information is being put to use by businesses, municipalities, and other entities — and it is continuing to scale rapidly. Schwerdtfeger terms this "exponential development" and says it is key to understanding future business trends.
"Human beings are hard wired to think in linear terms," he says. "But what could you do if your business system, such as ERP, were 10 times as powerful as it is now? We need to learn to think this way."
As an example, Schwerdtfeger pointed to the exponential development of the Human Genome Project, which began in 1990. By 1997, it was just 1% complete — but that actually represented the project's halfway point because it scaled at 100% per year. At that rate, it took just 6.5 years to get from 1% to 100%. The human genome project finished by 2003, and costs were lower than expected.
With this rapid propagation of technologies, Schwerdtfeger says, changes to organizations are going to be dramatic. As evidence, he cited a recent study from Washington University that says 40% of today's S&P 500 companies will no longer exist by 2026.
"Hearing this," he says, "people instinctively get into a defensive posture — they ask themselves, 'Who's going to eat our lunch?' But the question should be, 'Who else's lunch can we eat?'" In other words, those companies will be replaced, creating opportunity in the marketplace. Schwerdtfeger told audience members that they are well-positioned to spearhead these conversations and to find a way to stay on offense.
"There's more and more leverage in the system all the time," he says. "Technology is a form of leverage. You're either on one side of the leverage equation or on the other side of the leverage equation."
As technology evolves along an exponential curve, Schwerdtfeger says that, over time, repetitive manual jobs will be replaced by robotics. Moreover, repetitive cognitive jobs are likely to be replaced by algorithms. How do we plan for this? Schwerdtfeger says it boils down to two things: creativity and relationships.
"We need to focus on our ability to be creative and to work with other human beings," he says.
In his closing remarks, Schwerdtfeger encouraged attendees to think not only about what's happening in the world, but what they can do in response to it. His main message: think bigger. "When you think bigger, you inspire others around you," he says. "If you truly think big, you're going to outdo the competition."