an myob future of business report, may 2017 · an myob future of business report, ... significantly...

An MYOB Future of Business report, May 2017

But are we truly ready for an age of change – of a magnitude that will transform everything we know, to the point that the way we do business tomorrow will be unrecognisable today?

We may feel like we’re currently in control, but how do you plan for the social, economic and personal impacts of a period of total disruption?

Regardless of how we feel about it, the age of change is upon us. And however well prepared we think we are, the future is going to present challenges the likes of which we’ve never seen.

Its time to get ready now for the future of business. Welcome to the age of change

As business owners and operators we’re in a unique position. We know change is coming – we can see it everywhere, from the way customers order coffee to how we manage our finances.

After more than two decades of rapid change and evolution, businesses that have developed in the information age are used to the notion of disruption.

How well prepared they are for the next phase of change, however, when the pace and scale of change grows exponentially and disruption becomes the driver of business innovation – a new normal of constant revolution – is yet to be tested.

According to the latest MYOB Business Monitor, a nationwide survey of over 1000 small and medium sized businesses, 44 per cent of local business operators believe the nature of their industry will be significantly changed by technology in the next 10 years. Just 14 per cent of local business operators anticipate no technology-driven change over that period.

Those who believe their industries are most likely to be transformed by technology work in finance and insurance (58 per cent), and the professional sector (50 per cent), are exporters (52 per cent) or part of the tourism industry (50 per cent). Even in the country’s rural sector, only 18 per cent of business operators are not expecting to see any change in the next decade.

The key trends that business operators expect will alter their industry cover a broad range of technologies, many of which are rapidly advancing today. From improvements in connectivity and cloud computing, to robotics and machine learning, New Zealand business owners are anticipating significant change over the next decade.

43%

27%

39%

22%

33%

19%

23%

16%

13%

13%

15%

13%

14%

13%

18%

Improvements in connectivity

Cost to develop or introduce

Cloud computing

Too much Goverment regulation

The internet of things

Not enough time to innovate

Automation and robotics

Shortage of skilled personnel

3D printing

Lack of R&D funding

No barriers affect my business when it comes to innovation

My business does not require innovation

Big data

Machine learning

Lack of Goverment support

Source: MYOB Business Monitor, April 2017

Source: MYOB Business Monitor, April 2017

Even now, business owners already see telecommunications as the most important utility for their business (73 per cent), ahead of power (70 per cent) and transport (53 per cent).

But despite the increasing pace of technological change and its importance to the future of business, few local business owners see themselves as early adopters or fast followers of newly introduced innovations. The majority tend to buy new technology products at the same time as everyone else (35 per cent) or are reluctant to try new technology until most other people have it (33 per cent).

These attitudes are compounded by the many barriers local businesses see to introducing new technologies. From cost and red-tape, to a shortage of skilled staff, few local businesses are able to realise the benefits of innovation without facing at least some restrictions.

Which of these technology trends do you think will alter your industry in the next ten years?

So despite recognising that they will face significant disruption within the next ten years, due to a reluctance to take on new technologies and the barriers they see to adoption, will New Zealand businesses be ready for the changes they know will be coming? And how can we ensure local enterprises and the broader economy will be ready for the future of business in an age of disruption?

THE AGE OF CHANGE The Future of Business

In your opinion, what are the barriers your business faces when it comes to innovation?

As we can see today, technology is no longer changing business and society at the edges. It has become fundamental to the way we work and live our lives. And what we are seeing now is only a foreshadowing of what will occur over the next 20 and even 10 years. Technology isn’t just about to disrupt certain industries. It is poised to change the way we perceive and interact with the world.

Thriving in the age of change

by Futurist and MYOB Chief Technology Officer, Simon Raik-Allen


Simon Raik-Allen is MYOB’s

Chief Technical Advisor. His

role involves looking at the

current and future trends in

technology and how they can

be developed to benefit

Australasia’s SMEs. According

to Simon, while technology

will play a key role in the work

of every New Zealand

business operator by 2040, so

too will the businessmen and

women who are innovating

today and those that are the

innovators of tomorrow.

Everything will be in our reach, in less time than it takes to form a thought. Our ability to collaborate with anyone, anywhere in the world will be unparalleled. Automation will support every aspect of our working lives. And our ability to interface with the systems we use will be without precedent.

In this new stage of the information age, no business will be immune from change.

Take for example, the construction industry. In New Zealand, just 35 per cent of construction and trades business owners believe the nature of their industry will be significantly changed by technology in the next ten years. Yet, with the latest advances in machine intelligence and 3D printing, it is an area that is ripe for transformation.

Today in modern architecture, taking on a major project provides work for hundreds and sometimes thousands of designers. Very soon, a small number of architects will be responsible for conceptualising a design and an AI will be programmed to build out the rest of the design, with the engineering calculated to minute tolerances and all the relevant planning and compliance requirements coded right into the plans.

From there, robots will take care of the actual construction. Drop a robotic 3D printer onto an empty site, and it will print its way to the top of a building. It won’t need permits or council inspections that involve lengthy approvals – that is all designed into the building, and approved by the city’s AI.

We’re already seeing modular construction begin to transform the way homes are designed and built. It is a short step from there to having buildings 3D created right on site, or printed and packaged at a single factory, and delivered by an autonomous vehicle before being assembled by robots.

As profoundly changed will be the way we live within these new homes. Every light source will be a holographic projector, allowing us to work, shop or be entertained right from where we live.

Want to buy a new jacket? Any shop or mall in the world could be projected into your living room, allowing you to browse the racks and even virtually ‘try on’ the clothes. Need to feel the fabric before making a decision? A drone will be dispatched from a local warehouse to deliver a swatch through the drone hatch in your roof – every home will have one – within minutes.

Once you make your selection, another drone will deliver your new jacket to you in time for you to wear to the board meeting. This will be happening in your lounge in a few minutes time, with your colleagues gathering by holographic projection.

And when it comes time to sell your home – perhaps to upgrade to the new high-rise apartment that has just finished printing in town – your virtual real estate agent can project into your house, along with clients from anywhere in the world.

In New Zealand today, the retail industry, property and professional businesses and the finance sector are some of the fields in which business operators are most aware of the potential for major change through technology.

But are they truly prepared for some of the profound changes we will see through the transformation of some of our economic fundamentals?

Now that we have ratified web payments, real-time payment technology will remove all the friction from transferring funds. This also lays the foundations for technologies like block chain. Block chain is a shared database of agreements: a contract for delivery or milk, for example, or a currency agreement. This technology can be applied to everything: local and national governments, shareholding agreements, company structures. And it takes away a lot of power from centralised institutions.

When technological currencies start to transcend national borders and companies have their own currencies, it will completely change the dynamics of the finance industry. There’s enormous potential for geo-political shifts too: countries are defined by their currencies as much as they are by their borders. And the system of tax will also change, perhaps enabling societies to ensure the more equitable taxation of global corporations who profit from local operations.

All of this means the sectors today that are built around selling products and services and managing financial arrangements will be profoundly changed by technology.

And what of everybody else? In a world where a robot tractor can plough a field and repair a fence line, a robotic plumber can fix your toilet, a drone can deliver a coffee made by an automatic barista, AI can scan and approve a contract and a holographic projector can let you visit any place in the world, what place is there for a business that delivers any of these services today?

In the next two decades, every business sector in existence today will be affected by disruption. But in every one of the industrial revolutions to date, the global economy has been driven forward to even greater prosperity and fuller employment.

With the latest advances in everything from drones and autonomous transport,

to neural interfaces and holograms, technology will very soon have the

power to contract both space and time.


The commonplace use of wearables presages one of the most important changes in the healthcare industry: the rise of personalised, tailored healthcare supported by large-scale population data and individual scanner technology.

Imagine a future where, rather than going to the GP to diagnose a virus, your embedded scanner pings an alert to a centralised health agency. A prescription is delivered automatically to your local pharmacy which 3D prints pills with a precise dosage tailored to your illness and your own system. The pills are then dispatched by drone, arriving at your house as you are waking up, feeling a bit unwell.

Have something more serious wrong? Then pop along to your local health centre for a full body scan. Say you’ve suffered some organ damage – then a new one will be 3D printed for you using your own DNA and tissue, and installed in an operation conducted by a robot.

Over the coming two decades, every industry sector across every part of the economy will see the effects of significant technological disruption.

Ripe for transformation: Where can we expect change?

Some of these changes we can see beginning to occur today, in the advent of autonomous vehicles or the ‘appification’ of a wide range of useful technologies. In the future, however, change is likely to occur in many profound and often unusual ways – transforming the way we work, the jobs we do and the business opportunities available to us.

Healthcare

The generation of children being born today are predicted to be the first since the dawn of the motor vehicle who will never need to know how to drive.

In the next five to ten years, autonomous vehicles will become commonplace on New Zealand roads. The first industries they will disrupt, of course, are those involving professional drivers. Robotic transporters will replace long haul trucks and trains, autonomous ubers will take the place of taxis and larger drones will carry many of the goods currently airfreighted throughout the country.

As well as reducing emissions through more controlled driving and increasing driver safety, autonomous vehicles will transform the daily commute to a time when we can work productively, join a virtual meeting or enjoy a movie.

Automated warehousing will also replace traditional logistics businesses. With every item embedded with an individual RFID chip that transmits product and tracking data, it will be commonplace for machines to identify, load and ship materials without any need for human interaction.

Transport and Logistics


Travel and tourism

Recently surpassing agriculture as New Zealand’s largest export earner, the travel and tourism industry is ripe for disruption.

The development of virtual technology, such as holographic projection and 3D VR, could make it possible for anyone to visit a life-like representation of any place in the world, without ever having to leave home. No location in the world would be too remote, too dangerous or too expensive to visit through a virtual tour, perhaps conducted by an experienced local guide and augmented with the sounds, smells and even tastes that construct a true local experience.

For a tourism industry like New Zealand’s that is situated at the very end of every airline route, such technologies could be seen as a significant risk.

And yet, throughout human experience, no matter how difficult or dangerous travel has been, humans have had a strong desire to travel the globe. This innate need for adventure and novelty is unlikely to change, even though technology will make staying home more attractive.

What is likely is that technology will make travel experiences more exciting and engaging. Want to snowboard on that perfect patch of untouched powder? A personal autonomous flying vehicle can take you safely up the mountain. Want to capture your ride down a steep track in a remote national park for your thousands of social media followers? A small camera drone can track every moment (and alert rescue services when you come off and break your leg). Want a really good nights sleep, even though you are thousands of miles from the comfort of your own home? Your hotel can programme your bed to conform exactly to the specifications you’ve set for your mattress at home.

What about a gentle cruise a few metres above the Southern Alps as part of your leisurely tour above the South Island by ultramodern airship? A trip to a prehistoric nature reserve in Fiordland National Park, complete with real moa, re-engineered from ancient DNA? Or dinner at an underwater restaurant in Lake Taupo, reached by personal submersible.

And if you are a serious social influencer, your trip, hotel room or meal will be free – as long as you can share it with more than a few hundred thousand followers.

Retail

What we are seeing today in the development of e-commerce may be the end of the ‘bricks and mortar’ store.

As every home becomes equipped with holographic projection technology and drone or autonomous transport makes delivery fast and inexpensive, the need to ‘go shopping’ could simply disappear

However, humans crave both novelty and social interaction. So the transformation retail may see is one that turns shops into ‘experiences’ – demonstrating and showcasing the products with human staff who are highly trained in delivering the perfect service experience.

We may also see the return of ‘door-to-door’ sales, as local retailers seek to establish a point-of-difference from the huge international chains that will deliver around the world daily. Local artisan producers could bring their wares to your door or sell them at neighbourhood mini-markets, filling a niche demand for a truly local product.

According to a recent report by the World Economic Forum, the global value of manufacturing has steadily declined over the last 30 years, while the value of the service sector has grown. The rise of globalisation has also shifted the world’s manufacturing base, as developing nations take on more of the world’s productive capacity.

Technology, and in particular the development of 3D printing on a large scale, has the potential to shift the global manufacturing base once again. Start-up and production costs, as well as the cost of labour, fall dramatically with the increasing development of robotic and 3D printing technology. This will make it possible for countries, cities and even neighbourhoods to create their own, tailored manufacturing capabilities.

As robotics and autonomous transport make supply industries like mining, mineral extraction and logging more efficient – and far safer – costs of raw materials could also come down. The ultimate result could be that every town is able to have access to a fast, efficient and clean manufacturing facility, printing components and goods that meet every element of local demand.

Manufacturing


The industry driving the change is also likely to be the one seeing the greatest disruption. Currently the tech sector around the world is creating thousands of new jobs – including many that companies struggle to fill because of a shortage of appropriately trained candidates.

Improvements in training technology, including unique advancements in neural interfaces and even downloadable knowledge apps, could soon allow anyone to pick up the required skills to play a role in the industry.

However, the quest for new knowledge and innovation could also sideline individual companies and people altogether.

Advances in AI and machine learning have seen more discoveries being led by machines in recent years. For example, according to Science Focus, an AI coded at Tufts University, Massachusetts was able to solve the longstanding scientific mystery of flatworm regeneration in just 42 hours. By analysing and simulating countless scenarios, the computer produced a comprehensive model of how the flatworm’s genes allow it to regenerate.

Although scientists provided the AI with information, the machine in this experiment was able to create a new, abstract theory independently – a huge step towards the development of a conscious computer, and potentially a landmark step in the way we carry out research.

Science and technology

With access to any course and any lecturer from around the world, local universities and training colleges are going to have to work hard to compete with the best institutions from around the world, which will be soon able to deliver virtual lectures and training courses to students everywhere.

The opening up of online tertiary training is likely to be the first stage of the complete transformation of the education sector.

Within two decades it is likely that a good deal of a student’s course work, at every stage from pre-school to post-grad, is delivered to a digital device via the internet. Children will still gather to learn social skills – although a good deal of this interaction may be virtual. But the ability to deliver personalised, tailored training that matches the skills, aspirations and learning styles of each individual will drive enormous change in first the private and then public sector education.

Education


Developed for information technology storage in the late 19th Century, the punchcard was used to programme and control early computers, before being gradually replaced by magnetic tape in the 1960s.

Mind-control

Touch

Gesture

Mouse Voice-control

Punch card Keyboard

Now being explored by companies like Facebook and Elon Musk’s Neuralink, the mind control of computers will be a major change in the way humans use and interact with technology.

First imagined in the 1960s, early touchscreen technology was produced in the 80s before being refined to become a common interface in today’s digital devices, phones and tablets.

Gesture recognition, like that popularised in the film Minority Report, is currently being explored as a means of providing a human/computer interface which will not require any direct contact.

Developed from military technology, the two-dimensional trackball that was the basis for the computer ‘mouse’ was first introduced in the mid 60s.

As anyone who has struggled with Siri will know, voice recognition and control has been continually developed and refined since the mid 70s until present day.

One of the key elements driving technological disruption is the way we programme and interface with machines. Simplifying and speeding up the way we interact with computers, is one of the key stages in transforming the way we work with technology.

Right now, PayPal and Tesla founder Elon Musk is venturing into the world of direct neural interface technology, which will allow us to interact with computers – and each other – through thought.

Imagine a meeting where a team from around the world can collaborate on a design or project by manipulating 3D display on a virtual projection, using only the power of their ideas; summoning a remote vehicle or ordering a coffee, just by thinking about it; or learning a new language or a new instrument, by downloading a training programme through your neural interface.

And in this world, which is just around the corner if Elon Musk’s Neuralink can deliver the neural lace it is designing, what sort of new business opportunities would open up?

Plugging in to new technology

From the 1940s to the late 1960s, typewriters were the key means of interfacing with computers, before the keyboard – still ubiquitous today – became integrated into the computer terminal.


Five key ways you can prepare your business now

Have a conversation with a scientist. Talk to a new graduate.

Spend a day in a business outside your own industry. Looking at things from the outside and getting alternative

perspectives on our own approach can be extremely useful in not only

identifying potential changes but also new concepts and opportunities that

might let you lead disruption.

Once you have accepted that change is inevitable, it can have an enormously positive effect on your

business. If things are always done in a certain way, it might be time to challenge the perceived wisdom and try a different

approach. Bringing in fresh talent and new ideas can stimulate change. And

investing in innovation can prepare you to move quickly when change

arrives.

Listen to new ideas

Create a dynamic business

If you are one of the majority of New Zealand business owners that sit

behind the curve when it comes to adopting new technology, try to change your thinking by looking not just at the

costs and other barriers, but at the opportunities that you might

be missing.

Change your mindset

Technological disruption can seem to sweep into a business from nowhere. But there are always warning signs if you are prepared to look for them. Uber didn’t arrive in New Zealand first, catching the

taxi industry by surprise. The industry had ample time to develop their own ordering

apps if they wanted to be prepared for the company’s inevitable

arrival here.

Be alert to the signs of change

Think about some of the things that might change in your industry,

and imagine how you might respond to them. For example, if you are a builder, would 3D home printing put you out of

business, or would your company be the one supplying the technology and coding the machinery? What would it

cost to make the change, and how could you begin focusing

resources to make the shift?

Imagine a different future


an myob future of business report, may 2017 · an myob future of business report, ... significantly...

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