The Center for Global Business Third Annual Forum: The Future of Everything
- Evening and welcome to the third annual forum The Center for Global Business, The Future of Everything. Please note that this event is being recorded. My name is Marina Augoustidis and I'm the associate director of the Center for Global Business here at Maryland Smith. The center is the hub and driver of global education and activity at the Smith School. The mission of the center is to connect the diverse members of its Smith School community to the world and the world to the Smith School. Provide these members and partners with opportunities to gain a global mindset and build international business skills and to serve as a Maryland Resource Center for companies seeking to take their goods into the global marketplace.
The center is also one of 15 nationally recognized centers across the country to have been awarded a Title VI grant known as ciber. Beside grant is administered by the US department of education and supports many of our activities including this event this evening, and expands our mission outside of the campus to industry and other academic institutions. The annual forum is an event that occurs every spring and brings together distinguished voices from the academic, housing, diplomatic and business communities to speak on a different theme each year.
I'm honored to give a special welcome to our guest speaker Dr. Mauro Guillen, and to the center's academic director, Dr. Kislaya Prasad who will take us into a discussion after I finished a few more opening comments, before I introduce our guests please let me share a few tips to help us move smoothly through the next hour. As a reminder, the webinar is being recorded, it will be made publicly available will be at the school's website and emailed out to all parties events afterwards for future viewing, for optimal viewing, please select the view and the upper right hand corner of your screen. Additionally, click on view in the tool bar in the upper left-hand corner and then click hide non-video participants.
Following the discussion, we will open up the conversation for questions from the audience, throughout the discussion please feel free to send your questions to the host in the chat function, and we'll try to get through as many as we can and the order they are received at the end of the discussion. Additionally, if you are an undergraduate students seeking credit for iSmith, a QR code will appear on a slide at the end of the event. Please be sure to scan this, to receive your credit. Once the event closes you'll see a pop-up window with a link to take our two minutes survey about the event. We appreciate your taking the time to complete that, because your feedback is critical to the development of future virtual events.
If there are any technical difficulties on our end or yours we thank you in advance for your patience. Please also continue to engage with us on Twitter @smithglobalbiz for information on other upcoming events and programs including the global marketing virtual internship program the Maryland Global Consulting Program and Maryland Business Adapts. It's now my pleasure to introduce our guest speaker this evening, Dr. Mauro Guillen is the author
of the book "2030: How Today's Biggest Trends will Collide and Reshape the Future of Everything." Dr. Guillen currently holds the Zandman Professorship and International Management at the Wharton School at the University of Pennsylvania, and was recently appointed the next Dean of Cambridge Judge Business School which will begin in December 2021. From 2007 to 2019, he served as the director of the Lauder Institute of Management and International Studies, which led him to receiving the Aspen Institute's Faculty Pioneer Award. He's also received numerous distinctions such as the Rockefeller and Guggenheim Fellowships, his research has been featured from the New York Times to the Economist and his most recent book which we will discuss today was published in 2020 and as a wall street journal and financial times international bestseller. We will plan to provide information on how you can purchase his latest book in the chat in our followup communications, lastly, uncertainly but not least our moderator and academic director of the Center for Global Business Dr. Kislaya Prasad
please join me in welcoming our distinguished guests. - Thanks Marina, welcome everyone, it gives me a great pleasure today to welcome Professor Mauro Guillen to the Smith School. We gonna be discussing his new book, "2030: How Today's Biggest Trends Will Collide and Reshape the Future of Everything." The book as Marina mentioned it's a wall street bestseller and it sells from the "Financial Times" best books list. I read the book a couple of weeks back and I have to say it's a wonderful book. The book outlines the major trends today and shows how that interplay will determine our future.
Some of the trends will feel familiar but when Mauro gets into a discussion of the nuances you will find yourself frequently surprised, it's a complex and multilayered book that's the top line trend, and there are no answers there's fascinating data but multiple powerful stories that bring the numbers to life without lying to challenges, we will face but illustrates the kind of thinking that will allow us to rise to the challenges. So 2030 is not so far away, we will be living and working in that future and need to prepare for it today. So this book is going to be a useful guide for how we do that, so let's get started.
Mauro let me begin by asking you first, what made you think of writing this book and is there a backstory? - So Kislaya first of all thank you so very much for inviting me it's really an honor, I follow the research that comes out of the center that you direct, and I'm very happy to be here with, with your students with other colleagues from the University of Maryland and beyond. So about seven or eight years ago, I was making presentations sometimes in class with my students sometimes outside with corporate audiences and I was detecting a relatively high level of stress, people were thinking that too many things were changing in the world and they really didn't have a way of essentially getting their arms around them. And so I decided that it would make sense for me to do a little bit more research on it and to try to identify exactly what are the kinds of trends that are reshaping the world and then offer people a guide to essentially be able to navigate all of those transformations. And that's how the book came into being. I mean, it was six years worth of research and I essentially was trying to offer my audiences a way of understanding what's going on because again, I mean, strongly believe that we're going through a major transformation and that both corporations and individuals need to get ready for it.
- So let me ask you about the title then, Why did you pick 2030? And not that it's not some safe, distant future but it's like right around the corner can you give us a big picture view of why 2030 and what are the forces that will collide as you say in your title page by then? - Yeah, so that's a great question and it was an empirical decision that is to say I started to crunch numbers, I started to make projections into the future and I realized that the year 2030 was pivotal. So in the process of doing the research, for example I determined that Africa would become a second biggest region in the world by population exactly the year 2030, also that year South Asia, which includes India we're going to level off in terms of these population growth. But I also found that by the year 2030 the largest consumer segment in terms of purchasing power in the world will become people above the age of 60, right? And also by the year 2030, I forecasted that women would be owning more than half of the net worth in the world. So for some reason, many of these things were reaching a critical level or there was a turning point in the year 2030.
And that's why I decided to call the year I mean the book 2030, now my only regret is that as you know, the pandemic has accelerated things, right? Technological adoption is being accelerated, all sorts of things. And although I published the book five months into the pandemic and I was able to make some changes my only regret is that instead of calling the book 2030, maybe I should call it now 2028 because the future that I described in the book because of the COVID 19 pandemic is now arriving faster because these pandemic accelerates trends - That's fascinating because one of the audience questions that was submitted with precisely that, that how has the COVID pandemic changed the timetable. So it's actually made it, made it quicker. So let's, so maybe, as I said the book's really complex so it's hard to take a linear path through it but maybe I'll follow the progression of chapters and you begin with two chapters one called Follow the Babies and then Gray is the New Black which discussed the major demographic trends some that you just mentioned.
And so I'm going to ask you could you summarize for the audience what's been going on with the world's population and the significance of the alluded to Africa but could you get into that in a little more detail. - Oh, absolutely, so Follow the Babies it's all about the methodology that I used for trying to anticipate what global consumer and financial markets are going to look like by the year 2030. And essentially my assumption, the assumption that I make is that the young consumers of the future are the babies who have been born in the last 10 years and the babies that will be born over the next 10 years or so, so following the babies, understanding how many of them will be born in which parts of the world give you a very good first approximation to the future of consumer markets and financial markets. Now specifically about Africa, I think you are referring to perhaps what I believe is going to be the biggest change. I think Africa is quickly becoming the latest frontier in emerging markets and in the global economy, and the reason is of course, population growth. But it's not just population growth.
It's also the growth of the middle class the middle class in Africa is still incipient is quite small it's no more than 20% of the population, but it's growing, and if that process continues then Africa is not just going to be a place where foreigners go in to get oil and to get minerals it's going to be a consumer market. And when I asked Chinese leaders, business leaders and I'm sure that you also do that as part of your activities at the center, when I ask them why are so many Chinese companies investing in Africa? The response is because of the consumer market that is emerging they want to be prepared for that. And so I think because of these population, dynamism Africa is going to be a very dynamic part of the global economy over the next, I would say not just 10 years, but 15 to 20 years.
- And at the same time you mentioned that China is now paying follow up for its one child policy that which where everybody is rushing and they're looking to Africa right now as you point out. - Absolutely. - So, one of the things I found interesting in that chapter is to mention that should affect our view of immigration and could you maybe expand on that.
- So Kislaya I guess, that you and I are buyers, right? When it comes to thinking about immigration because obviously both of us have benefited immensely from the opportunities that the United States offers to people like ourselves who are willing to work hard and are willing to study and to make progress in life. But look, I think the phenomenon of immigration or people moving around the world it's just a direct consequence of the fact that we have some parts of the world where a lot of babies are still are being born and other parts of the world war, fewer babies are being born. And also we have very big differences in terms of the job creation capabilities of economy so some economies like the American economy, for example is like a job creation machine, right? I mean, at all levels for both low skill jobs and highly skilled jobs the American economy produces or generates many jobs. Now, as you know, the debate is as to whether integration is good or bad, and I'm not going to argue that unlimited immigration is good. Of course there has to be some order in it. But think about since we're all talking business here today think about how many companies in the United States have been founded by immigrants.
Think about all of those companies in the Silicon Valley that have been founded by immigrants. I mean, Facebook, I'm sorry not Facebook, but Tesla, Google, several of these technological powerhouses have two things in common, one is that they have changed the face of the economy, and the other one is that they were either founded or co-founded by immigrants. And look, this is statistic I find mind-boggling of all of the companies in the Silicon Valley that have gone public about one third half an Indian, somebody from India as either a founder or co-founder. I mean, that's a staggering, right? And that, lastly, let me point out now we're in the middle of a pandemic if you take a look at the doctors and the nurses who work in the United States about or between 25 and 35% of them were born outside of the United States.
So not only we have a pandemic, we also have a rapidly aging population. So we can out immigration of doctors and nurses we wouldn't be able to provide healthcare here in this country. So the benefits of immigration are, I think obvious the problem is that there's always a politician that exploits the issue and that essentially creates or generates fear in people. And immigrants are an easy scapegoat, like if something goes bad, you blame the foreigner you blame the immigrant and I think people like you and I who know better, of course we need to do a better job at persuading people, and that's why I included a few pages in the book quite a few pages in the book about immigration, because I think it's gonna be really important to engage in that attempt that persuading people that immigration is good for the economy is good for the United States.
- So in the chapter sorry, you say that the emphasis of marketers on what millennials want happens to be misplaced and that the most significant group, both in terms of numbers and purchasing power are the grain or people growing older. And so talk about where we will be in 2030 and what opportunities this presents for our businesses. - Yeah, so I have nothing against millennials.
I mean, I have my two daughters are millennials, okay? But having said that look up until now every generation of people was bigger than the preceding generation. So naturally then brands companies were paying a lot of attention to consumers in their 30s, and their 40s, that was the bulk of the market. But now moving forward because of this process of population aging, we're gonna see that first in Japan, then in China, after that in Europe then in the US, then America and the rest of the world. We're gonna to see that the largest consumer segment is gonna be people above the age of 60. But look, I think we are, a lot of people misunderstand the nature of that segment because somebody who celebrates his or her 60th birthday today in the United States, and there's about 12,000 people today celebrating the 60th birthday, so happy birthday to them. Most of those people are still in very good mental and physical shape.
So to be a 60 year old or a 65 year old, or a 70 year old eating so much better physical and mental shape than somebody of the same age, but 50 years ago. But we can no longer call them old. That's the problem that's the old way of thinking about it, right? People now in that demographic that they still have a very active lifestyle. Many of them continue to work, they want to continue traveling they want to do all of the things that they did when they were in their 40s and in their 50s So I think a very large market, as you mentioned there and here's another statistic that I find out very revealing is like which is like again in United States 80% of the net worth is owned by people above the age of 60, 80% in other countries in the world is not as a skewed it's more like 60 to 70%, but that means that this purchasing power potentially in that age group. So I think that this process of population we call it aging I think it's actually gonna change consumer and financial markets beginning here in the United States very soon. - You actually, if I remember right make into interesting connection with the success of Airbnb and the aging of the US population.
And could you maybe expand on that? - Absolutely look Airbnb is a fantastic platform and as you know it has actually weather the pandemic really well. I mean, think about the travel industry is completely devastated by the pandemic. Airbnb went public in December, right? And the price of the share actually went up and that's because Airbnb knew how to reinvent itself during the pandemic. But I think originally the big insight that the founders of Airbnb had was that you have two generations at that point in time, I'm talking about 10 or 15 years ago. You have millennials who dislike hotels who dislike banks, who dislike owning a car all of those things on the one hand. So people who would like to experience travel in a different way, and then you have another generation of people who have space in their home because they're, empty-nesters because they also perhaps need a little bit more money because their retirement fund didn't do as well in the market, as they thought they're willing to rent some of that space or even an entire space, when they, for example, visit family the people, so you have those separate generations what we needed was a digital platform that would enable those two generations to get together and to engage in what we now call the sharing economy.
So I think that's the absolutely terrific insight that the founders of Airbnb had that nobody else did. And that's why today they're billionaires because they understood that there was that differential situation between the two generations. - So I'll turn to the chapter Keeping up with the Things and the Ranks and you discuss what is happening with the middle-class around the world and what the middle-class school look like in 2030. But before we talk about that I was wondering if you could expand on what is the middle-class and why is it so important I found that discussion in that chapter very interesting.
- Yeah so look I think the best way of describing the middle class is that, it's a state of mind, right? Being middle class is being different and it's all about, I think knowing that you have some economic security, right? Knowing that you can send your kids to a good school, knowing that you can take a vacation, knowing that you will be able at some point when you can no longer work or no longer want to work you will be able to retire, that's the middle class now. How exactly we define it empirically that's another matter but it's a state of mind, but it just so happens that the middle-class is absolutely central to the market economy, because as you know, consumption, domestic consumption is now 60, 70, even 75% of the economy in many countries around the world, both advanced economies or mature economies like the US or the UK or France but also in emerging markets like India, right? The consumption, domestic consumption represents a very large proportion of total gross domestic product. So if the middle class is growing that means the economy probably has a lot of potential, but as you know, over the last 30 years or so, the middle class in Europe and United States has, and at the same time, the middle class in emerging markets like China, India, Thailand, Turkey has expanded, not just in terms of the number of people who are middle-class but also their average income. And so those economies are on a roll that are growing and everybody likes the potential there because the middle class could even grow bigger, whereas once again, on both sides of the Atlantic North Atlantic ocean, what we're seeing is stagnation - I felt from the point of view of businesses what do you think would be the implications of this shift in the center of gravity, of the global middle class to, - Let me point that two implications because I think there's many. One of them has to do with brands, so for the last hundred years or so brands have thought about new products, about new services with the European and the American consumer in mind, right? And as you know, many of the theories in international business many of the theories in the field of management actually make that assumption, right? And so moving forward I think brands will have no choice if they want to be truly global to pay more attention to the Asian countries.
And of course when I say Asian consumer, that's very heterogeneous, right? I mean, the Indian consumer is very different from the Chinese consumer, even within India, as you know better than I do, there are all sorts of variations and the cultural differences and of course linguistic differences and so on and so forth so I think increasingly what we're gonna see is that brands and I think it's gonna be tough for some of them. They want to be able to say okay, we're going to be signing new products and services just keeping in mind our idea of the American consumer. That's no longer going to be possible because the most successful brands will be the ones that are flexible enough or versatile enough to be able to cater to the needs of all of these different kinds of consumers around the world.
So I think that's one very big implication of this. The other big implication of course is look the nature of global competition. The largest market will be China and India. So we shouldn't be surprised if Indian companies and Chinese companies are gonna be among the biggest in the world because naturally they will have a big market share in their home market.
And then many of them already have expanded abroad. And so they're gonna be the largest companies in the world, I wouldn't be surprised if in 10 years from now we see that in the global 500 ranking of the largest companies in the world that we actually have more competition from China and India than from Europe and United States combined. I wouldn't be surprised at all - Moving on to service, very struck by the observation that women are accumulating wealth now faster than men. And the interesting statistic you have that by 2030 more than half the world's wealth will be owned by women. And what's behind this enhanced economic status of women? - Yeah, so Kislaya I believe this is the biggest thing.
and the one that is gonna have the largest impact. And let me explain why. So the reason why women are accumulating wealth faster than men is because now women in more countries around the world have better access to education. And if they have better access to education what happens as you know, is that they stay in school then they go to the college, they postpone having babies.
They pursue a career maybe later on they have one baby or two at most, but that's about it. And so they're making their own money. And look, this is a statistic that I find absolutely telling, right now as we speak in 41% of American households where there is a man and a woman married to each other, in 41% of those cases the woman makes more money than the man, okay? And they forecast by the US bureau of the census is that by the year 2030, okay. So once again, we go back to that year, more than half of those households will have a woman who makes more money than the man for the first time in history, right? So the implications of these look, consumer markets are gonna change but it's not gonna be so much in terms of beauty products and those kinds of things, it's services.
If women, if they have money in their pockets they're more willing to spend more on healthcare, on education, on insurance. They care more about the future than on average men do. But I think it's also gonna change financial markets and the world of investing because let's not forget the statistics about, for example asset allocation in pension funds or the experiments that our colleagues conduct in terms of having men and women make decisions about what to do with our money. So that women are more risk averse when it comes to investing their money.
They're also less likely to do something that is really bad for longterm performance of your investments which is that they stick to their choices. Men are more likely to change their investments more frequently which as you know it's actually not a very good strategy over the long run, right? So that's what's driving it, what's driving it is that women have better access to opportunities, they have more of a presence in the labor market and they are different on average as consumers and as investors. So as a result, consumer markets and also financial markets are gonna change - But it's not all a rosy story as well. I mean, you speak also of diverging fortunes of women based on a variety of factors. - Absolutely, Absolutely.
I was talking in average terms, thank you for reminding me about that. So for example, here in the United States as I document in the book there are three groups of women who are having a very tough time. I mean, one is teenage mothers, okay? Another one is just in general more broadly single mothers, okay? And the third group is divorced women. Contrary to the popular wisdom that women make a lot of money when they get a divorce, that's not really the case, it's only in very specific cases involving billionaires, right? Normally what we see five years after the divorce or 10 years after a divorce is that women are actually worse off financially than if they were married and let's not forget, and this is something that coming from Spain really struck me when I first came here to United States. Luckily more than half of all first marriages in the United States end up in the boards, slightly more than half, right? So this is something that affects a lot of women out there.
And once again, they tend to prefer negative consequences. - But do you think all of this economic empowerment means that we can be optimistic that we'll have true gender equality by 2030? - Well, I think progress has been made but perhaps not fast enough as far as we know or as you know, yes, women now have better access education, in fact, in American colleges there's more women than men now, right as you know, but then it seems as if once they started working there are a number of things that prevent women from becoming, for example, top executives. We have very few CEOs as you know, in the United States especially among the largest firms.
So there's a number of obstacles that women encounter for example, the motherhood penalty, right? The fact that many of them, they decide to have children and that makes it harder for them to continue with their careers and that the source of paid discrimination as the Me Too movement, other types of discrimination of the Me Too movement are brought to our attention so powerfully a few years ago. So I completely agree that that's just be obstacles, there's still discrimination and all of that, but I think it's also at the same time undeniable that women today play a role in the economy that is just completely different from the one that they used to play 20 or 30 years ago - Well we turn to the subject of cities now. So every time I'm in New Delhi I think of the city of my childhood with wide open streets, sometimes even empty streets. And now whenever I'm back there, it's steaming with people at any time of day or night and many more are added almost every day as the migration that's been going on, just continues and will this trend in the growth of cities continue and what's the implication of that? Both good and bad. - Yeah, so let me make, I'll give you an answer both before the pandemic and after the pandemic because I think a lot of people are asking themselves as to whether this particular trends will be reversed by the pandemic because people no longer have to leave them down, given remote work. So before the pandemic, what was very clear is that cities were growing extremely fast every week that passes, that was passing before the pandemic about the 1.5 billion additional people were living
in cities in the world. And look, I mean, just 40 years ago there were only two cities in the world, three cities in the world with more than 10 million people. And New Delhi wasn't one of them, right? Those cities were New York, Tokyo and Osaka. But now we have more than 30 cities with more than 10 million people and New Delhi as well as Mumbai and Kolkata is one of them, right? So cities are growing really quickly, especially in South Asia, including India and in Sub-Saharan Africa.
So what's gonna happen with the pandemic So I can perfectly see how some people here in the United States now that they have remote work available to them may decide to move outside of the downtown area or if they already live in the suburbs then instead of leaving only 15 miles from downtown they will now move further out, they will get more space for the same money and why not? So I think that may happen in Europe, in the United States. It may happen in some European countries, but quite frankly I don't see that happening in India. I don't see that happening in China. I don't see that happening in Sub-Saharan Africa. I think in those parts of the world this process of the growth of cities will continue. And by the year 2030 by the way, we're gonna have more than 70% of the world's population living in cities.
And so that's gonna continue changing the face of the economy and also outlines, right? Because life in the city is very different from life in this small town. - Yeah, well one way I feel it's different is that you have the starkness of the inequality that you see in cities and the other is the effect on the environment you see in a much more concentrated way possibly than you might see in rural areas. And so those are two things you talked about questions. - Yeah, no, absolutely, I mean, you're putting your finger on something that I think is extremely important which is that cities are great, they offer opportunity, but not everybody who moves to the city and take advantage of that.
And so as you said these cities have become unhinging of inequality, I mean we see such a stark contrast here in the United States. I mean, New York City has some of the wealthiest areas in the world within it's boundaries but at the same time also some of the poorest. So the other issue that I think is important is you also mentioned cities occupy only 1% of the land in the world. Right now, they're home to about maybe 60% of the population but cities account for 80% of all the carbon emissions in the world. And so unless we somehow make cities more efficient in the use of energy, unless we persuade consumers in the cities that they have to be less wasteful I think it's gonna be very difficult to deal with all of the environmental problems that we have, climate change the crisis of not enough water and also plastic contamination which as you know is a really, really serious problem now for the world. So yeah, I think we need good ideas.
We need entrepreneurs, we need good managers to help us make cities more efficient, more livable and above everything else more environmentally friendly. - And you suggest that maybe just nudges can do that. I like the phrase you have there, the mundanity of excellence that you talk about could you maybe expound on that? - So I think we should continue to invest in new technologies for example, to liberate ourselves from fossil fuels. We should continue to ask our governments to come to agreements as to regulations, global regulations like to slow down the rate of climate change, but then I think you and I as consumers, we also have a responsibility.
look here in the United States, it's mind-boggling right? The US department of agriculture estimates that 30% of the food that reaches our table goes wasted 30%. But as I document in the book, the agricultural sector including the use of fertilizers including growing cattle, including the transportation of the food is the single most important contributor to carbon emissions in the world. And yet we waste 30% of it, right.
Of the food. So as consumers, I think we need to change. And that's why I introduced a concept that was developed by Daniel Chambliss the sociologist of the mundanity excellence that sometimes very small adjustments in our behavior when everybody does it and have huge impacts in the aggregate. And so if I try to save a little bit more of the resources that I consume, and I am not alone many other people also do the same thing I think that can be, or can eventually become a very important contributor to our effort in terms of slowing down climate change - In the chapter and I love the title of this chapter Most Cellphones than Toilets. And again, you know, coming from India this is a problem that resonates with me.
You write into the power of technology to tackle some of our most pressing global problems. And these you point out with have become even more intractable by 2030 they're intractable today, but even worse then. And so can you give us the example of maybe the headline of the chapter but maybe some of the others as well? - Yeah so the chapter More Cellphones than Toilets is precisely what you said that especially in South Asia, what we see is that many people don't have access to a toilet connected to the sewer which is the kind of thing that we assume that we have in the United States or in Europe, right? But they do have access to a cellphone. There are cell phone towers in their neighborhood and they can communicate and I think that speaks volumes about the priorities, people today feel that being connected so much more important than having access to it.x, right? And I think that's important because I do strongly believe that digital technologies and in particular phones have the potential to help us reduce poverty.
Because as you know in many cases, farmers for example in rural areas in Africa and South Asia they have trouble securing the fertilizers that they need or they have trouble securing other inputs like seeds. And they also have trouble if they have a surplus, selling that surplus in the market because we don't have access to, don't have information about the prices. Not only that now with your phone in many parts of Africa as a farmer you can purchase weather insurance, right? So I believe that these interconnectivity that you and I like of course because we are constantly in touch with the people we care about and also with the news and that we can do research using digitized databases and so on and so forth and collaborate with other people around the world. But for farmers, for example poor farmers in Sub-Saharan Africa and let's not forget 70% of the population in Africa still lives of the land, right? I mean, they're farming, they're into farming.
It's completely liberating. This technology is liberating because they're isolated the the nearest bank is two hours away by bus. The nearest doctor is also two hours away by bus but cellphones with telemedicine, with microcredit enable them to prosper.
And so I think it's just that we're going through a big revolution and we're only seeing the beginning of this, right? I think we're gonna see so much change in this respect. - Other examples that you that you mentioned was sort of robotic surgery, 3D printing, virtual reality, internet of things. I don't know if you or whether the government's nano tech, so maybe if you could elaborate on some other examples. - Absolutely, I am a big believer in 3D printing. I think 3D printing will help, especially isolated communities be able to secure what they need, the local printing, ah, virtual reality, you mentioned, you know, 10 years ago I thought virtual reality was only for video games that was the only application of virtual reality. But now I think in the age of remote work I think virtual reality is gonna make these platforms so much more useful if they incorporate that kind of technology.
But the other area is health. I mean, so many applications of virtual reality for example, as a therapy for people who suffer from autism okay. Or as a therapy for people who suffer from dementia. So what we're seeing increasingly and I think this is extremely important moving forward is that these technologies that we thought were only for fun are now finding applications, right? In so many different fields, fields that matter, fields that essentially promise to increase our quality of life. And I think that's what technology should do, right? What technology should do is increase our quality of life open up new possibilities for us. And I believe that these technologies that you mentioned especially with 3D printing and virtual reality in addition to AI, this was the big data.
All of those other things they have, I think they're gonna have enormous potential in the world - On AI I actually liked your example of just, there's so much talk these days of ethical AI and you had this example of how ethics in different countries in the world is different and resolving that into ethical artificial intelligence is a very is a very, very difficult problem. And I thought that gave a really whole interesting new dimension to some of the AI issues that you mentioned, I'll turn to, and I'm keeping track of the time. And do wanna make sure the audience has a good time for questions but I will ask you about the chapter, Imagine no Possession. And you writing that by 2030 the number of things we may share home, cars and jobs may well be nearly endless. And we see that jobs are being broken up into tasks. People get fractional access to property like homes and automobiles and they can invest in risky projects without intermediaries.
So we've all experienced both some of the benefits as well as some of the downsides of the collaborative economy. So in 2030, where do you see the collaborative economy and do you think it's gonna make the world a better place? - Yes, the sharing economy, the collaborative economy through all of these digital platforms that we've been talking about. I think it's gonna change quite a few things. I mean, we're already seeing in terms of urban transportation, we're seeing in terms of travel and accommodations with the example of Airbnb but I think it will go well beyond that. I think for example, remote work and the gig economy, right? All of these independent contractors, people who go to TaskRabbit and they make money by taking on jobs that are not a full-time job set up required to be at the office from eight to five but rather specific tasks that you need to complete. But more importantly, let me go back to the issue of how wasteful we are as consumers.
I think that if we use these digital platforms to a great extent, for example to create more secondhand markets more pre-owned vehicle markets, more recycling I think it will be great. And when it comes to food, by the way there are digital platforms that are trying to promote sharing the food that we're about to throw into the trashcan within our cities, right? Because once again, we wish that so much of it. So yes, I think the sharing economy has the potential of revolutionizing everything. And by the way the biggest implication of all would be what happens when we have fewer people owning assets and increasingly those people sharing assets because as we know, the market economy for the longest time has been built on the assumption that people have property, right? You own a house, you own a machine that helps you make other things, you own a shop.
So what happens when ownership doesn't become the central feature of the market economy? I think that's a really important question for the near future. - So I have sort of two short questions on that one is, will this make the world more or less unequal? - Could you repeat the question again? I was distracted by a noise. - Will this make the world more or less unequal or related to that will jobs as we know them disappear.
- I apologize Kislaya again, could you repeat the question? there was a noise that was bothering me, sorry. - And not at all, so will this make the world more or less unequal and also will it make jobs disappear as we know them? - Well, look, I think the two questions are interrelated. I think we have more inequality because we're finding ourselves in a situation in which some people lose their jobs and they cannot find another job that pays as well. And that's because of technological change. Sometimes it goes from free trade but they're not gonna change it essentially making certain kinds of skills are redundant or obsolete. And so I think the two issues are so related.
In fact, I think they are the two sides of the same coin that we need to deal with them simultaneously and that we need to make a bigger effort than the one that we've made over the last 20 years in terms of ensuring that nobody's left behind. I think the fundamental problem that we've made or that we've created for ourselves is to just simply assume that people would lose their job because of technological change, because of automation that they would be able to find some other job but that's not as easy as that, when people are in their 50s for example, it's difficult for them to move from one city to another. When people are in their 50s they have less motivation to learn or to acquire a new skill. And so this has created many problems, I think in Europe, in the United States, both economic problems but also political problems.
So I hope that moving forward, we pay more attention to this issue and we make every effort not to leave anybody behind. - My last question, before we turn to the audience in which is what would be your tips and tricks to survive 2030 or to prepare for 2030? - Yeah, so in the book, I mentioned seven tricks as you said and of course I could spend the next half hour just start going through each of those tricks but let me summarize it or let me boil them down into two basic principles, okay? So the first is and it applies to both companies and individuals. We have to come to terms with the reality that things are changing very quickly.
I just think there's a lot of people who are thinking, oh, this will pass, right? And we're gonna go back to the good old days, to the golden age and look that is impossible. There's no turning back. You cannot turn the clock of history back. So the first thing that we need to do is as companies, as organizations, as individuals is accept that change is going on. And then the second thing is you need to make decisions.
You cannot wait until the year 2030 until everything has already changed. Companies and individuals need to start making decisions now. And here is one of the principles that I explained in the book for me, the most important one which is never make a decision as you try to adapt to these new circumstances that is irreversible. Every decision that you make has to enable you to engage in course correction because if you make decisions that are irreversible and then things turn out in a way that you did not anticipate then you're gonna find yourself against the wall or again in a corner. So it's extremely important to keep your options open as you know a very famous theory in finances options theory and look the value of a financial option increases with uncertainty.
And so that's, I think the value of a real option. So as I make decisions today I wanna keep my options open for the future because given that so many things are changing, maybe I we need to exercise some of those options. So never make any irreversible decision. That's my second piece of advice. - Yeah, thank you so let's turn to some questions from the audience and I think the earliest one that came in today was from Raj, who said, Africa is a very exciting place.
Which industries do you think will take off there by 2030? - So which economies, industries. - Which industries. - Oh industries look, the first thing that I think is gonna happen in Africa is there's gonna be an agricultural revolution because as you know, the yields, the productivity of a Africa and I'll show, it's really low I mean, it's like 10% or even less than what it is for example, in California which has one of the most productive agricultural sectors in the world. And so the sky is the limit, right? I mean, people look at those statistics on productivity in Africa and they say, oh, what a disaster? I actually look at it and I say, oh my goodness there's so much room for improvement. So all we need to do is give the farmers the means. We need to give them a cellphone.
We need to give them the seeds the fertilizers the information, so that they can become more sophisticated at what they do. So I believe there's gonna be first, a revolution in agriculture There is also gonna be a big revolution in terms of the processing of those fruits. And that's already part of manufacturing the food processing industry, but then let's not forget the other example I would put is education. There's gonna be a big boom in education in Africa because between now and the year 2030 nearly 400 million babies will be born in Africa and you know what? They don't have the time to build the schools. They're gonna have to use remote learning. They're gonna have to use all of these digital platforms that now we seem to be using in some other parts of the world out of necessity because of the pandemic but in Africa that's gonna be the way they're gonna do, the same way that if you remember they never built enough ATM's or bank branches they went directly to mobile payments, right? And the same way that they also are using telemedicine to a much greater extent than we do here in the United States, for example.
So I believe that again, as I said agriculture, food processing and then education and all of the other related service industries. I think there's gonna be a big boom in Africa. - I'll turn now to one of the questions that were submitted by people who registered actually, it was several questions on cryptocurrencies and I'll pick one out of those which said, what role will cryptocurrencies play in the future, are they a fad or the next primary currency of the future? - Yeah, so first I think cryptocurrency is an amazing innovation. Now, the problem is that governments central banks they don't want to lose control over the printing of money.
They don't wanna lose control over monetary policy and perhaps it would be good for us that they didn't lose control over interest rates 'cause just imagine in this pandemic without the Federal Reserve. I mean, the American economy will be dead by now. I mean, the Federal Reserve was ready to act and they acted. So I think the future of cryptocurrencies however it's gonna be a little bit more complex than just cryptocurrency.
I think what's gonna happen is that we're gonna move into a world in which we're gonna have digital tokens. And those digital tokens will be primarily about smart contracts. So for example, I book a room at a hotel that gets recorded into my digital token onto the blockchain eventually.
Or I signed a tuition contract with the school that I'm attending or I sign a contract to work for a company or like purchasing a home. All of those things can be implemented on the blockchain as a smart contract. And we can also add cryptocurrency as part of that. And we could also include discounts. We can include all sorts of things that I think is the future, is a bundle of services, including cryptocurrency but not only cryptocurrency, I think that's the future.
And if we move more towards those digital tokens I think central banks and governments are gonna see that the efficiency in the economy will increase. They're gonna see the transaction costs go down. And so they're gonna be a little bit more favorable towards those innovations.
- So we have a question from Risto Agarwal you spoke about increasing wealth, you spoke about the increasing wealth and advancement for women in the race to digitalization and as technology pervades all aspects of society and economic systems, will women experience adverse outcomes as a result of digital disparities? - Yeah, now that's a great question. And it is true that there is gender digital divide in the world. There's also an income digital divide meaning that wealthier people and wealthier countries of course have better access. They have a better wifi, they have better devices and so on and so forth but specifically about the gender issue.
This is something that I find very surprising that the gender gap not only exists in developing countries or emerging markets where not all women get, have access to education. It also happens in the United States or Europe. I mentioned at the beginning that now you have or we have more women than men in college, attending in college but having said that, there is still this digital gap. So I think simply put we need more effort being put into eliminating all of these gaps, not just the gender one but also any gap that has to do with ethnicity or with race with income level, because at the end of the day, I mean information and access to information now in the 21st century is almost as important perhaps even more important than access to oil during the 20th century, right? So, it's really discouraging to see that the question was asking about that women across the board, around the world have, are experiencing this digital gap. And it's something that I think we need to address.
- And as your book has taught me one should also view that as an opportunity to expand the digital access for women. We also had several questions on the skills and also the academic majors that will be in demand in the future. I'll pick a question for you. What are some of the best major areas of study for the future? Could this be data analytics and supply chain management or are they just likely to be automated? - Yeah. so let me tell you on that. I know that this is gonna be controversial, okay? But I have the data on my side. And the data have been collected by particularly economists at MIT and at Stanford.
And that they show that in the American economy the number of jobs that require what we call technical skills is gonna continue growing, okay? Is gonna be there, but by far the highest growth will be in jobs that require social skills. For example, the ability to negotiate, the ability to work in teams, the ability to work in virtual teams in remote work. And so much so that this is what I'm going to say, okay? Artificial intelligence, machines in the future are gonna program other machines. So it's not yet, I don't understand why so many people wanna major in computer science.
I simply don't understand it, okay? Because unfortunately I believe that in 5-10 years from now many of those people are gonna find themselves out of a job because machines are gonna be programming themselves. We will still need computer science majors don't get me wrong, but not as many I believe as we are producing, I was very happy for example when one of my daughters was thinking about majoring in computer science and then she changed to maths because that's where I'm going. I think the skill, the most valuable skills in the future will be in addition to social skills such as the ability to negotiate or working teams these skills that help you learn because whatever you learn today is gonna become obsolete very quickly, given technological change.
But if you have the ability to acquire new knowledge very quickly, that is gonna be really helpful. So one of those skills is very easy. Writing, reading and math. Those for me are the three basic skills. So do some magic that helps you develop those skills because they're gonna be really important in the future. So once again, writing, reading and math or the humanities, they're great because they help you become a good reader and a good writer.
The science is great, mathematics, we're gonna need a lot of managers but we're gonna need managers who are flexible, who know how to work in teams, who know how to negotiate and managers who can acquire new knowledge. So also the managers that we bringing up business we need to help them be very good with numbers of course but also very good with words. - Great, thank you. I don't believe we have time for more questions.
So I just want to take my last minute here to thank you so much for coming in. First, the opportunity to read your book which I found really excellent and then spending this hour with us and our students. I'm really grateful, thank you. - Oh, thank you Kislaya and let me just add one thing which is that I've used that research coming out of the University of Maryland for the book. I mean, if you examine the sources, so it's reciprocal. I also admire very much the research that you and your center and other units, other departments within your campus has been producing, a very helpful, very useful research.
- Thank you.
2021-04-20 02:28
