Creative destruction defines future tech. Think Amazon versus Sears. The business model of retail employees serving customers in shopping malls is being displaced by smartphones and artificial intelligence (AI) devices like Amazon’s Alexa. Amazon ends up hiring thousands of new work associates while traditional retailers like Macy’s close stores. Amazon's stock price has grown 400 percent over the last five years while Macy's is considering selling the business.
This creative destruction process defines our economic future. But it raises this question: How can companies survive, or even thrive, in a future tech economy of simultaneous value destruction and value creation?
For example, companies like Dupont and GM earn hundreds of millions of dollars annually from zero-waste manufacturing facilities. California is pioneering Zero Net Energy buildings that use a combination of AI, IoT, LED lights, mesh connectivity, solar, and batteries to slash or eliminate electric bills.
In five years autonomous vehicles will be a reality seen on our streets and highways. The reason will be lower cost. And an autonomous riding-sharing car service will cost about a tenth of a service that depends on drivers, according to some estimates.
Most urban autonomous vehicles will be electric because EVs cost less to fuel and operate. The global growth in electric vehicle use, lead by China, is projected to reduce oil demand by 2 million barrels per day by 2020. The last time this happened, the price of oil dropped from $100 per barrel to $25 per barrel. This sent oil company stock prices falling while six of America's eight largest oil-producing states remain in an economic recession from this price drop.
Future tech will make recharging an electric car cheaper than filling up a gas tank. And utility-scale solar power plants now generate electricity for 3 cents per kilowatt-hour. That is less than the generating cost of coal and natural gas power plants. This holds the potential of pushing the electric utility industry over a financial cliff if their coal and natural gas plants become worthless because they cannot compete on price.
Meanwhile, virtual reality (VR) tech continues to emerge. It will massively change how people work together. VR removes the need for humans to physically meet. It replaces the conference room with a digital, three-dimensional environment. Think that sounds like years away? Ford is already designing cars and holding meetings using VR tech. This helped slash Ford's product development time while reducing transpiration costs.
But future tech’s economic victory will be costly. Jobs will be lost. Families and communities threatened. Future tech has the potential to divide America between those who benefit and those left behind.
To avoid this dystopian future, America should take action immediately to ensure future tech leadership while so making future tech work for all Americans:
Image credit: Flickr/Duncan Hill
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