The Director of the Future Planet Research Centre, David Hunter Tow, predicts that the current explosion of new services will trigger the biggest treasure hunt in the history of computing technology.The Services Sector is currently in turmoil with thousands of startup companies cashing in on new opportunities to re-engineer traditional ways of doing business- and this is just the beginning.
Every process is currently being transformed into a new service- not just in traditional service sectors such as retail, media, education, healthcare, tourism and finance, but also in industry areas such as manufacturing- with made to order 3D printing techniques, medical processing- offering personalised DNA sequencing and diagnostics instantly on an iPhone chip, and inexpensive solar energy and water purification systems cheaply available for domestic use in developing countries.
There’s not one established service process that’s not being seriously disrupted by smaller more agile independent players, leaving the lumbering giants that once dominated commerce in the 20th century stumbling blindly in their wake.
All major service sectors are currently being carved up, their key functions hived off and new innovations successfully introduced in competition with those of the original gatekeepers, continuing to guard their crumbling IP parapets, while new knowledge is generated by the terabyte.
What is catalysing this frenzy and where is it heading?
A number of convergent factors are involved in this 21st century phenomenon – breakthroughs in new technology- mobile computing, augmented reality, artificial intelligence and information analysis, massive social change in the form of deregulation of knowledge generation and access spurred on by the social media and global Web; and an unstoppable surge in the creative potential of a new generation steeped since birth in the cyber revolution, but now cheaply available; all combined with the very low cost of market entry for innovative entrepreneurs.
Of course online retail and marketing started the ball rolling in the nineties and has never looked back. Traditional main street bricks and mortar retail has been fighting a ferocious rearguard action, but by and large it’s been a losing battle ever since. The smart retailers hedged their bets by combining new boutiques and online websites, but overall, new leaders in the revolution such as Amazon, eBay, Apple and Google as well as thousands of smaller specialists, just kept upping the ante with greater global choice, faster service delivery and deeper discounts.
Then came the new wave of targeted retail service apps nibbling away at the leaders- companies like Foursquare peddling Deals of the Day- but now over 130,000 Android and 300,000 Apple apps covering- self-checkout, barcode scanning, loyalty programs, coupon and discount offers, retail location discovery, best buys, augmented reality advertising, customer reviews, consumer preferences and recommendations and mobile platform payment functions- all making the online and store shopping experience easier and more exciting. And for developers- the social media to inexpensively promote them.
In the meantime the traditional Media and Advertising industries were hurting. Gone were the salad days of broadsheets generating the golden streams of classified advertising revenue from job, real estate and used car advertisements; paying for the packed newsrooms and inflated expense accounts in five star global hot spots.
In their place one stop outsourced stories and editorials with duplicated online headlines.
Again a frenzy of online experimentation began. But pay walls had only limited success, even for the heavyweights such as the New York Times and Wall Street Journal. Classified and banner advertising continued to haemorrhage, migrating to web sites at greatly reduced prices and the social and alternative media led by a myriad young independent operators, grabbing the best headlines and news stories via cheap phones.
As a result the print operators such as News Ltd are only pale shadows of their former selves and have quietly retreated to the more glamorous world of cable television and film. But this is only a temporary reprieve as the low budget independent film and documentary makers gain ground on YouTube and in Arthouse cinema seats, shooting with low cost video cameras, while at the same time chasing the more interesting reality footage; all supported by the citizen journalists and freelance bloggers desperate for a voice in the brave new cyber world.
As a result of this revolution the power of traditional media services has seriously waned and is likely to have largely disappeared within a few decades, replaced by countless personalised web channels and DVD and gaming startups, controlled by myriad smaller, more energised groups and individuals.
At the same time the Advertising industry is in a monumental bind- caught in the headlight glare of change; trying to find the magic brand formula for clients by mixing and matching the traditional and burgeoning new media- but apart from reverting to Google and Facebook, not having a lot of success with either, unable to capitalise effectively on the thousands of creative local specialists and the cornucopia of apps.
Over time traditional advertising will therefore become less significant to major brands as it transitions to an infotainment format, with thousands of independent product sites and apps providing instant comparative advice to consumers without the retrospin of big business.
EducationBut the big revolution in services- the game changer of the 21st century, will come from easy global access via mobile online learning to high quality inexpensive education. This, according to educators, will turn every mobile phone into a knowledge portal and return education to the golden age of sharing ideas among communities of scholars, releasing them from a boring classroom environment with second rate lecturers more interested in their next overseas conference schedule.
Interestingly the revolution is being led from the inside by some of the biggest and most hallowed institutions- Harvard, Stanford, MIT and Yale. Suddenly global tertiary level courseware and soon secondary level as well, is available at very low cost from these prestige US universities through massive online platforms such as Coursera; while third party reference sites across the Web such as Wikipedia, Google, Microsoft and Facebook plus a host of talented independent specialists will provide countless training services by integrating and coordinating domain related knowledge.
This is the next phase in the democratisation of the world’s storehouse of information, driven by the need to realise the potential of the vast under-educated populations of Africa, Asia and the Middle East that have missed out on the planet’s opportunities. It will allow anyone with a mobile phone or tablet to access the same level of knowledge regardless of location, income or the availability of local training resources.
Over the coming decades therefore the services of learning and education will undergo a profound shift, from the traditional classroom/face to face method of knowledge transfer to a much more abstract model, where teaching will be largely separated from its current physical infrastructure, such as classrooms and campuses.
It will also be linked to the Cyber Revolution- transforming the world’s knowledge base into a vibrant multimedia forum- using the latest 3D, virtual reality and gaming technologies- all delivered by smart mobile and embedded multi-media kinetic devices linked to the Intelligent Web.
HealthcareNow the medical and healthcare services sector is also ripe for revolution. Phone apps are increasingly available to act as remote monitors for home based medical and health support purposes- the remote diagnosis of life threatening conditions and algorithms to calculate correct drug dosages and interventions for acute illnesses such as diabetes, malaria and HIV.
This revolution has been driven to a large extent by the healthcare needs of half the planet’s population that still live in dire poverty, unable to afford traditional life-saving hospital support or medication.
These and many other diagnostic and treatment services are now putting patients at the centre of the management of their own healthcare with the help of trained volunteers, bypassing the bottlenecks involved in the traditional delivery of medical services by scarce qualified practitioners.Future services will also be based on the accessibility of whole-of-life eHealth records across both the developed and developing world, eventually allowing the creation of online global health records from pre-birth to death, providing personalised remote support services delivered on an iPhone or community personal computer. Within a decade, health records will include the sequencing of an individual’s genome as a vital diagnostic service at a cost of a few dollars.
A number of other technological breakthroughs will mark the expansion of new healthcare services within the next few decades including - stem cell therapies to repair human tissue and organs, reversing heart disease for example; prevention of cancers and neurodegenerative diseases such as breast cancer and Alzheimer’s; sensory repair such as early retinal and corneal implants; prosthetics including neuron-controlled limbs; brain/ nervous system interfaces, overcoming spinal paralysis using brain signals; and interactive humanoid robots to provide human companionship and physical support.
All will be available as relatively inexpensive services once the enabling technologies have been approved. Why? Because if the major healthcare companies don’t provide them at an affordable price, entrepreneurial groups will, as occurred with the generic drug revolution in developing countries when Big Pharma refused to drop their prices.
Finance/BankingThe Finance and Banking industry has been a sitting duck for radical change for a long time- getting bigger and more obese with minimal outside competition – seeking to control ever more functions in a frenzy of greed- from investment, transaction processing, payments, exotic specialist derivatives, consumer credit, foreign exchange, mortgage provision, money transfers, advice on mergers, trading and anything else that shows a hint of making easy money and inflating their balance sheets.
There have been numerous exposures of the underlying level of corruption within the finance and banking industries, to the point of defrauding their own customers and incurring horrendous trading losses by rogue dealers through sloppy oversight, in the process threatening bankruptcy for themselves and their clients and culminating in the GFC. But it didn’t deter them for long and despite some fresh regulations and a massive infusion of taxpayer dollars, their insatiable greed continued to explode.But if government regulators have failed to reign them in - a number of agile competitors offering cheaper, safer and more convenient services, may do the job for them.
The major looming battle is between the traditional finance industry and the global technology giants such as Apple, Google and Paypal- using their skills at creating innovative software to provide Payment and Credit card services, using wireless apps that allow mobile phones to store loyalty and credit card information, make payments and transfer money. Technology-poor African countries such as Kenya have taken the lead in these services of convenience and already provide perfectly viable phone money transfer services via text, bypassing expensive banking services.Now the bloated goliaths are fighting back with their own brand apps. Banks are also using contactless near field technology to convert smartphones into mobile credit and payment devices. But it may already be too late as the genie has escaped the bottle and the smart entrepreneurs realise the banking emperor has no clothes, except Wall-Mart hand me downs.
It is likely that banks in their present form will cease to exist within the decade, effectively disembowelled by smarter consumer and business service providers. They may become primarily back office transaction processors and routine mortgage providers, with a veneer of deal making, offering a line of credit for smaller uncomplicated businesses. All other functions will become the province of highly skilled specialists.And so the frenzy of creativity and service disruption will continue in all areas of commerce and industry, as the current generation of software engineers and innovators becomes acutely aware that the rules that propped up the old corporate structures are obsolete.
The old software guard that controlled the boundaries of commerce so tightly are also increasingly ripe for the picking because the original rules governing old sectors such as retail, media, manufacturing, banking, pharmaceuticals, photography, music, publishing etc, just don’t hold up anymore. They don’t reflect the changing social currents of the new era, stuck in the quicksand of the past. Therefore the software and systems houses that propped them up and contributed to their stranglehold, such as SAP, Oracle, IBM, HP, Yahoo, Cisco etc, are also irrelevant, weighed down by their own legacy technologies, now being systematically cannibalised by more agile and visionary players.Take any industry. Who buys the software that was developed for it in the 80’s or even 90’s? Very few, except the dinosaurs locked in by exorbitant long term maintenance agreements and they are now paying a very high price for their conformity- unable to adapt or switch systems before being swallowed by the next wave of innovation. Their present systems just don’t reflect the changing way of doing business or social norms that the new generation of consumers want and have come to expect.
The technology keeps shifting and each time it moves it exposes the soft underbelly of the existing services and providers. Those like IBM that have survived have had to radically remodel their businesses. In the case of IBM – from hardware to software to services and now jumping on the ‘smart planet’ mantra.The next generation of providers- Google, Apple, Amazon and Facebook along with thousands of smaller service developers have already moved in on these crumbling bastions. But even this new order are in turn being held to account by a host of smaller creative startups. And no matter how often the established leaders of any systems generation try to reinforce their monopolies by swallowing the smaller more agile enterprises, they are constantly outflanked by the tide of new knowledge and innovation.
And so the dance goes on – faster and faster and the treasure trove of potentially lucrative services keeps growing.