Excerpted from Looking Ahead.
Since the advent of the Internet, we have become used to things that were unthinkable barely a decade ago, with revolutions in mobile, social media and big data. To help identify future changes brought about by the ascent of digital and how organizations can keep pace, we turned to Jeff Huber, senior vice president at Google X. During his 10 years at Google, he built Google’s advertising systems and Google Apps. Most recently he ran Google Maps, which has over a billion users. Google X embodies a radical model of innovation where “moonshot” projects enable radical solutions powered by breakthrough technologies to solve huge problems affecting at least a billion or more people.
■ Machine learning
I think machine learning is the first one. There’s a lot of talk in the industry today about big data, but I think that’s looking at it too narrowly. If you’re using a data warehouse today to get faster answers to the questions you have, that’s a useful first step, but that’s not where you need to be. You need to keep pushing beyond that. Instead of relying on human intuition and what people can imagine today, turn that over to the machines so they are proposing the questions and hypotheses, they are identifying the patterns and highlighting opportunities that are indiscernible to humans and bringing new insights that you wouldn’t have imagined.
If you look behind the systems that Google is working on, these are all machine-learning based systems where it’s the machine gaining insight, gaining understanding that is beyond human scope to propose in the first place.
■ Continuous connection
The second trend is that there is enormous power in having not just ubiquitous broadband but, importantly, continuous connection — it changes how people learn, how people think about health and medicine, for example. It is probably the biggest factor changing the world. John Doerr’s famous comment in the 1990s about the Internet being “under-hyped” is still true. We are just beginning to understand the implications of everything being continuously connected.
■ Precision medicine
The third area that is going to have enormous implications is personalized precision medicine. The gains being made in health today are dramatic and accelerating. It’s mainly from computing meeting biology, with technologies like genome sequencing which have already yielded a new round of understanding in cancer drugs, for example, Genentech’s development of Herceptin. The concept of computing being able to understand the next level of biology, not just in general or average terms, but specifically for you — that is a massive change.
■ Every business is an online business
Every business today has to recognize that it is an online business. Every industry and segment is going to become smart and continuously connected and transparent and probably will be marketplace priced. It’s just a matter of time before every industry will get there, so you have a choice of taking the lead and making it happen or having it done to you. If you don’t recognize what’s happening, there’s a good chance you’ll be disrupted or disintermediated.
Bringing in the right digital skills and experience is only part of the answer. Cultural change has to pervade the organization and leadership must be fully committed. There are great leaders today who don’t get it yet; they need to become infected, immersed. They have to believe in their soul that this is part of the business of the future and unless you bring the entire organization along, you’re not going to get to where you need to be.
■ Innovation is key
You have to set the expectation of innovation everywhere and in everything that you do. No matter what your industry, the biggest danger is viewing your market, your business and your ecosystem as static because they never are. Companies either innovate or they die and if you’re comfortable today in your static ecosystem, it’s only a matter of time before somebody comes and kills you.
If you look at the kind of innovation around transportation and hospitality businesses like Uber and Airbnb, you can see what I think will be a very strong trend: businesses creating new marketplaces by providing aggregation and transparency. Another example would be Lending Club, where I recently joined the advisory board, which is creating a transparent marketplace to bring together borrowers and lenders/investors and has the potential to be extremely disruptive of the personal and small business lending space.
■ A return to insourcing
Another issue that is over-hyped is outsourcing, which is already starting to come down. Across manufacturing and IT, there is a real renaissance in doing those locally and thinking deeply about the intellectual properties embedded in those activities because they drive innovation. One of the perceived drivers of outsourcing was that it was cheaper to do in other places, but that’s now being proven wrong due to the equalization of pricing across different geographies. In China and India, the cost of outsourcing is rising alongside the cost of living. Also, it’s harder to innovate or to iterate rapidly in those models. So if I can do something locally, I can achieve faster iteration, faster innovation, faster cycle times and I can end up well ahead from an innovation perspective and close to an equivalent position in terms of cost.