Nine Tough Questions 1

The Warsaw School of Economics is the oldest, most prestigious, and top-ranked business school in Poland. Dr. Piotr Turek received his PhD in Economics there and went on to become a fellow futurist and new media expert in Warsaw where he works as a journalist, lecturer and mobile/web services expert.

In early January, Piotr contacted me and asked if he could interview me for a series of publications in Poland. When I agreed to the interview, I had no idea how tough these questions would be.

An edited version of the interview recently appeared on Futurist of the Year, a site designed to promote the study of futurology in Poland.

Since the answers submitted were more extensive than what they had room for in the magazine, I’ve included the long-form interview here.

Why should we study the future?
Why should we study the future?

1.) Dr. Turek:  In researching people to interview for this article, you instantly jumped out as one of the most respected futurists with deep insights into a variety of topics. Let’s begin with the topic of futurology and what it means to you. Why it is so important to study the future?

Frey: As a Futurist, people often ask me how many of my predictions have come true. I find this to be a rather uncomfortable question. It’s uncomfortable, not because my track record hasn’t been up to par (actually, a high percentage have come true), but because accuracy of predictions is a poor way of measuring the value of a Futurist.

In a world filled with MBAs and number crunchers, there is a constant push to reduce our analog world to digital analytics so we can accurately measure our return on investment.

But not everything is measurable in this way.

Thinking about the future is like a muscle in our brain that rarely gets used. Over time, our brain will atrophy and we lose our ability to think productively about what the future may bring.

At the same time, the world is shifting faster than ever. Our need to know about the future is no longer a luxury; it’s a functional imperative.

With this in mind, here are eight critical values that a Futurist has to offer:

  1. Altered Thinking – The future is constantly being formed in the minds of people around us. Each person’s understanding of what the future holds will influence the decisions they make today. As we alter someone’s vision of the future, we alter the way they make decisions today. My goal is to help individuals and organizations make better, more informed decisions about the future.
  2. Unique Perspective – The future is unknowable, and this is a good thing. Our involvement in the game of life is based on our notion that we as individuals can make a difference. If we somehow remove the mystery of what results our actions will have, we also dismantle our individual drives and motivations for moving forward. That said, the future can be forecast in degrees of probability. By improving our understanding of what the future holds, we dramatically improve the probability with which we can predict the future.
  3. Evidence of Change – Empirically speaking, forecasting the future is not done by staring at tealeaves or reading tarot cards (that is the realm of psychics). Rather, futurists take an interdisciplinary approach and employ a wide range of methods, from the study of cycles, to trend analysis, to scenario planning, to simulations, to back casting. Futurists use data from the past and present, as well as other concepts and methodologies to understand how the present will evolve into probable futures. We also borrow freely from other fields, such as forecasting, chaos theory, complexity science, organization development, systems analysis, and sociology.
  4. Connecting the Dots – Futurists come from a wide range of backgrounds and perspectives. What we have in common is well-researched big-picture-thinking, strong pattern recognition, and innate curiosity. Ideas that are routine in one industry can be revolutionary when they migrate to another, especially when they challenge assumptions and rewrite common knowledge among the rank and file.
  5. Find Your Future Competitive Advantage – French novelist Marcel Proust once said, “The real act of discovery consists not in finding new lands but in seeing with new eyes.” The most successful companies don’t just out-compete their rivals, they redefine the terms of competition by embracing one-of-a-kind ideas in a world heavily steeped in “me-too” thinking.
  6. Take Control of Change before Change Takes Control of You – Are you changing as fast as the world is? Change is inevitable, but how you deal with change can vary greatly. In a world that never stops changing, great leaders can never stop learning. How do you push yourself as an individual to keep growing and evolving? Does your company push you in the same manner?
  7. The Future is Where Our Children Live – Our desire to leave a legacy is a uniquely human attribute. However, our legacy becomes meaningless if we don’t have new generations of people to pass it on to. To many this may sound like an obvious statement, but to those in the business world, there is a constant battle being waged over the needs of the present vs. the needs of the future. It’s very easy to place short-term profitability ahead of long-term problems.
  8. Every Avalanche begins with the Movement of a Single Snowflake – Our ability to tap into and leverage the power of the future is directly tied to the number of times we think about it. The more we think about the future, the more we expand our understanding of it. And the more we understand the future, the easier it becomes for us to interact with it.
Google's Chief Engineer, Ray Kurzweil, believes machine intelligence will exceed human intelligence by 2029
Google’s Chief Engineer, Ray Kurzweil, believes machine intelligence will exceed human intelligence by 2029

2.) Dr. Turek:  Do you agree with Ray Kurzweil’s prediction that a connection between brain and Internet will take place before 2030, and does this concern you in any way?

Frey: Over the past 30 years, artificial intelligence went through a couple major boom and bust cycles because the algorithms failed to live up to the hype.

Since 2012, a specific machine learning technique called “deep learning” has permeated the AI world, and we’ve made more progress in the past four years than in the preceding 25 years on several key AI problems including image understanding, signal processing, vocal comprehension, and understanding text.

Keep in mind that deep learning still isn’t true AI, the kind of sophisticated and adaptable intelligence humans exhibit, but it’s a giant leap forward on the path to getting there.

Futurists like Vernor Vinge and Ray Kurzweil began focusing on the exponential growth of artificial intelligence several decades ago. With ever increasing advancements in areas like nanotech, biotech, chemistry, and bioinformatics, they’ve predicted we will be able to create a race of superhumans with decision-making abilities far beyond our ability to understand them.

Through these early efforts the field of transhumanism was born, referring to a form of superhumans with capabilities far beyond what we can comprehend today.

My sense is that people are far more nuanced and complicated than researchers have ever imagined, and while we’ll create closer facsimiles to human cognition, we’ll never be able to achieve a complete AI mind with inorganic materials.

The “singularity” itself is a bit of a mystery. Some have predicted 2029, and others 2045, but the exact nature of the transformation being predicted is still rather fuzzy around the edges.

Will artificial intelligence become integrally linked to the human mind as in a symbiotic relationship? Will “boosted” humans have the same values, ethics, incentives, and levels of consciousness as people today? Can we also “boost” intelligence in plants and animals?

Some of the differences between a human mind and an artificial one can be found in the emotional value we place on things around us. For example, we may value the softness of a nice pillow because it is comfortable around our head, and while artificial intelligence can duplicate the value, it can’t understand why.

Similarly, artificial intelligence can be designed to take initiative when certain criteria is met, such as cleaning a floor once it is dirty, yet it still can’t grasp the reasoning behind it.

AI cannot intuitively feel anxiety, stress, anger, or fear. Humans can be plagued with hundreds of physical and psychological conditions like insomnia, claustrophobia, kleptomania, xenophobia, or narcolepsy, all of which are considered a flaw in the human condition. But these failures are what make us who we are.

Without failure there can be no motivation for improvement.

Our drive and motivation comes from our own insecurities, and without this wide range of physical and emotional shortcomings, the only initiatives AI will be able to muster will be the well-calculated kind.

At the same time, what’s the point in replicating flawed humans? Our current advantages over machines involve things like adaptability, resourcefulness, our ability to make ethical decisions, and our desire to leave a legacy. But for how much longer?

Over the coming decades the achievements of machine intelligence will continue to hockey-stick its way up the exponential growth curve

However, no breakthrough technology is without its unintended consequences, and this one is no exception.

In our rush to solve all of life’s major problems, and we each have our own utopian image of the good life, our drive for solutions will leapfrog us directly onto the lily pad of perfection. It will be this drive for perfection that will be our undoing.

Ironic as it may sound, perfection is an imperfect concept.

Each of us has been born and raised with all of the foibles and limitations of being human. A typical day involves forgetting where we’ve put our keys, stubbing our toe, getting angry at the wrong person, and dropping a plate full of food. And those are just the little things.

We are indeed intelligent beings, but for all of our limitations, the intelligence we possess doesn’t seem hardly enough.

That said, AI is on the verge of becoming a powerful tool in our lives. In much the same way computers and machines are being leveraged to improve our capabilities today, AI will be integrated into our lives in thousands of different ways.

I love the question that Caltech Professor Kip Thorne likes to ask. “A thousand years from now, what things will be possible, and what things will not?”

Only time will tell.

Will we be able to protect intellectual property in the future?
Will we be able to protect intellectual property in the future?

3.) Dr. Turek:  Over the next 15 years we will run into a number of dicey issues concerning the intellectual property rights of artists and proper payment for their work? What are your thoughts on this?

Frey: Our society places great value on creativity, originality, and discovery. History books are filled with talented people who figured out how to “zig left” when everyone else “zagged right.”

Recently, a company called Qentis unveiled a computer program capable of generating every possible combination of words on a single page, effectively preempting any future copyright claims.

Using a similar system, the company can also generate every possible combination of musical notes on a page giving them a priority claim to every “new” musical score.

Likewise, a software company called Cloem has developed a program capable of linguistically manipulating the claims on a patent filing, substituting keywords with synonyms, reordering steps, and rephrasing core concepts in order to generate tens of thousands of potentially patentable “new” inventions.

In much the same way computers are capable of generating every possible combination of lottery numbers to guarantee a win, patent and copyright trolls will soon have the ability to play their game of “fleecing the innovators” at an entirely new level.

More importantly, it confuses the concept of originality, and compromises the contribution of an individual if a version of every “new” idea already exists.

Naturally there are steps that can be taken to prevent this kind of abuse, like adding video proofs of the creation and statements from witnesses. But once artificial intelligence enters the picture, the deceptions will become even harder to sort out.

How beneficial would a global currency be?
How beneficial would a global currency be?

4.) Dr. Turek:  Do you think we are headed for just one world currency, or maybe none, and we return to exchange goods for barter?

Frey: The future of banking will be mobile, happening on devices we carry in our pockets, built into jewelry, and on our wrists, not in fancy office buildings.

In less than five years, smartphones, watches, and other devices will replace credit/debit cards, wallets, lenders, stockbrokers, and insurance agents.

There is a good chance that we will have a default global currency arise from the cryptocurrency movement.

The primary purpose of a global currency will be to have a stabilizing effect on other currencies. However, it will not operate to the exclusion of others. There needs to be multiple currencies to serve as a form of checks and balances for the global economy.

Over the past few weeks I’ve become enamored with the power of financial friction. This could involve everything from adding a tenth or hundredth of a cent charge to every email sent, social media “likes,” video downloads, views of copyrighted photos, and much more.

Even though it may not seem significant, there is a huge difference between “free” and “0.1 cent.”

Tiny charges, much like the rest of life’s sandpaper, tend to give us clarity between what’s significant and what’s not.

The reason this has become such an important topic today is because transaction costs have plummeted along with the cryptocurrency invention of distributed block chain ledgers, and the possibility of creating “nano-payment” networks is opening the doors to thousands of new fractional payment models.

The traditional way of providing online services like email, news, or uploading photos has been to pass the cost of operating these services on to advertisers.

But that could change.

Over the past decade, micro payment schemes have created successful business models around charges less than $1. As an example, Google’s AdSense charges advertisers as little as a few cents for every click of their ads.

It’s only recently, with the introduction of Blockchain technology, that we’ve been able to consider much smaller charges, even less than a penny.

In the past I’ve been an ardent advocate of simplicity, but over time my thinking has changed. Automation enables complexity, and the intricacy of complexity is what opens the door for unusual new business opportunities.

As a way of expanding our thinking in this area, here are 8 short scenarios with brief explanations.

  1. When it comes to e-books, would you rather pay $7.99 for the entire book or a tenth of a cent for every page you read? With this type of model it would be very easy to run the analytics and determine which chapters, sections, and pages most resonate with readers.
  2. If you received a tenth of a cent for every “like” on Facebook, but also had to pay a tenth of a cent every time you “liked” someone else’s page or photo, would you be making money or losing some at the end of each month? How could this Lilliputian economy be translated in other areas?
  3. For photos with a copyright, whenever someone clicks to expand the image, their account would be debited a tenth of a cent. In this scenario, the owners would be incentivized to having their photos show up everywhere to increase exposure.
  4. As a blog reader, every time you click “continue here,” you would be sending a tenth of a cent, or multiple tenths for every page viewed, to the writer. Would this incentivize more blog writers?
  5. Would you be willing to pay a tenth of a cent for every page you view on Facebook, Twitter, or LinkedIn just to avoid all the ads being directed at you? The amount you pay would be in direct proportion to how much you use these services, but still a relatively small amount.
  6. Should every text message come with the option of paying a tenth of a cent to keep your service ad-free?
  7. When it comes to videos, should a pay-per-play charge of a tenth of a cent be added to every YouTube, Vimeo, Vine, Twitch, or Viddy play? Should people posting videos have that option for remuneration?
  8. Similarly, does it make sense to add a tenth of a cent charge for every episode of RadioLab, NPR, Freakonomics, or TED podcasts?
What role do banks play in our future?
What role do banks play in our future?

5.) Dr. Turek:  What kind of banking products and services will be relevant in the future and how do you envision banking to evolve in developing countries between 2020 and 2030?

Frey: There are approximately 2.5 billion people in the world who do not have access to traditional banks, yet nearly half of them have a mobile phone. These phones have enabled some of the poorest economies to leapfrog the wealthier countries because they don’t have to worry about their legacy infrastructure.

As an example, people in Africa are three times more likely to use mobile money as their counterparts in Europe and the U.S.

In fact, nine African nations now have more mobile pay accounts than traditional bank accounts.

Kenya is an example of how mobile money can dramatically transform a country’s economy. In 2006, less than 30% of adults had access to formal financial services. Today, thanks to M-PESA, that figure stands at over 65%.

M-PESA was originally designed as a system to allow microfinance-loan repayments to be made by phone, reducing the costs associated with handling cash and thus making it possible to offer lower interest rates. But after pilot testing it was expanded to become a general money-transfer system.

Launched in 2007 by Safaricom, the country’s largest mobile-network operator, it is now used by over 17 million Kenyans.

One study found that in rural Kenyan households that adopted M-PESA, incomes increased by 5-30%. In addition, the availability of a reliable mobile-payments platform has spawned a host of start-ups in Nairobi.

In 2014, the service processed over $20 billion in transactions, a figure equal to more than 40% of Kenya’s GDP.

The M-PESA experiment has paved the way for fintech startups like Abra in other countries.

Much of the fintech revolution happening in the tech world offers tools for improving the economy of developing countries.

Today there are 2.6 billion smartphone subscribers in the world and that will grow to over 6.1 billion in 2020. Smartphones will replace the need for many of today’s banking services and will open the door to a variety of new payment technologies as well as new banking options.

As an example, where bank transfers today still take two to three days, Bitcoin technology makes it possible to transfer money instantaneously and securely from person to person. This is inspiring startups, like Abra, to offer a more convenient and affordable way to move money.

Abra is the world’s first digital cash peer-to-peer network.

The basic premise behind Abra is that anyone should be able to send money from his or her smartphone to any other person via their phone.

If a user wants to send $5 to a friend, all they need is the recipient’s phone number. If the recipient doesn’t have Abra on their phone, they will receive a text message telling them to install the app.

The app also takes care of currency conversions so that the value is never subject to the fluctuations of the price of Bitcoin or traditional costs in currency exchange.

Abra enables users to store money digitally on their phone, send that money to any phone number in the world and then, using a network of Abra tellers or traditional banks, exchange that digital money for cash. Since all money is stored on the phone, Abra never touches the money.

The only cost for their service comes from funds transferred to traditional bank accounts or converted to cash.

The Abra app currently works with users and banks, in the US and the Philippines, with plans to expand into India and other parts of Asia over the next couple years.

With $436 billion USD in remittances flowing to families in developing countries in 2014, the market opportunity is significant.

Final Thoughts

The people of the world have an “unfinishable mandate” to continually stretch, grow, propagate, and master not only the world around us, but also the entire universe.

The human race is genetically pre-dispositioned to push the envelope, color outside the lines, and reach for things that will forever be unreachable.

As individuals, there will be some who are content to find inner peace and live a minimalist lifestyle. But as a race, we will be driven by a need to make a difference, be admired for our accomplishments, and create moments of triumph in our otherwise pale existence.

We have only taken the first step in a trillion mile journey. The next few steps, in my opinion, will be nothing short of spectacular.

By Futurist Thomas Frey

Author of “Communicating with the Future” – the book that changes everything

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One Response to “Five Tough Questions: The Warsaw School of Economics Interview”

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  1. Sequoia Carpenter

    The future of money is suspect because it perpetuates the “What is in it for me” syndrome. Greed continues to be the downfall of mankind. The Free Internet revolutionized our world, yet that is slowly slipping away. We should not have to prove our worth by “earning” money and Paying others. Mankind seems to think that certain rights are up for sale or debate. Human survival is not up for sale! We each have the right to live a Joy filled life and there are more than enough resources to go around making this not only possible but imperative. A Resource Based Economy or one without the use of money is the only viable choice moving forward.

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