WAKE UP The nine h#shtags of digital disruption DAVID FAGAN Wake Up_titles.indd 9/08/2017 11:05 AM CONTENTS Author’s Note ix Introduction: A Digital Tale 1 #RealityBites 17 2 #InTouch 39 3 #InMotion 65 4 #Fit4Purpose 85 5 #Learn4Life 104 6 #CustomerFirst 123 7 #ShopTilYouDrop 145 8 #AlgorithmsOfLife 167 9 #ARobotAteMyJob 186 207 Conclusion: The Moral of the Story References 219 Acknowledgements 223 To Jeff Fagan, who taught me to value the future AUTHOR’S NOTE My 12-year-old asked recently about what life was like when I was her age She wondered if I thought then (like she does now) that everything had already been invented I thought for a few seconds and told her certainly not When I was 12, man had just landed on the moon The future looked rosy for kids who wanted to space travel, and I had no doubt that during my lifetime we would all be dropping into the moon for a visit We might even live there But it wasn’t just the prospect of flying to the moon that convinced me more was to come It was the boundaries we’d pushed to get to that point If we could fly through space, I believed, we could just about anything Indeed, in the 45 years since the Apollo program was abandoned we have achieved a lot Technology has given us a better understanding of the planet and its place in the universe It’s given us new ways to learn, travel and cure ourselves, and also offers ways, if we choose to use them, to mitigate the demands that our growing population places on Earth’s finite resources AUTHOR’S NOTE ix Advances in technology have changed our lives in ways I couldn’t possibly have imagined For example, when I was a child, I was herded into a school hall to watch the lunar landing on a black and white TV Recently, my children were captivated by the American presidential elections and watched the progress of the count on their phone screens This may not seem surprising but only because the process that turned our telephones into our personal TV stations, movie theatres and bank terminals has been gradual I’ve seen firsthand how these incremental changes have impacted on traditional business models and organisations and also the way it has influenced our personal behaviour, affecting our daily habits and lifestyles My perspective on these digital transformations is entirely non-technical I have spent most of my life as a journalist and editor working on a large metropolitan newspaper and covering stories on the trends that shape society – in the political, business and cultural spheres – and trying to understand the changing needs of consumers who were finding new ways to get their news and entertainment as online media channels opened up That newspaper, The Courier-Mail, was one of the world’s most profitable early in the century and moved quickly to embrace digital technology – although not as quickly as the businesses that seemed to come from nowhere to better serve the lives of readers and advertisers who left the traditional broadsheet newspapers, in some cases after decades of loyal readership I now work in higher education in a senior position x WAKE UP guiding digital strategy and running programs that educate and advocate change readiness As an executive immersed in digital change I have gained many insights into emerging technologies and how governments, organisations and businesses are adapting to these changes – for some the possibilities offered by developing technologies are a boon, while others have not been so lucky And it’s not just in the office Every bit of my life, and the lives of my friends and family, are being changed by technology – whether it’s the endless parade of teenage selfies, the access to just about any song or book ever written or recorded, the ability to discover any piece of trivia that has ever been noted, or the reconnection through social media with friends lost for decades This is entering a new phase Artificial Intelligence (AI) allows computers to draw from existing patterns to anticipate how you want to behave, and what you might want to next This already happens when a message on a phone tells you how far it will take to get to a destination you regularly travel to En masse, the same technology can analyse the data of millions to quickly solve a problem they might not even know they have All the evidence suggests we are still early in this change process I’m sorry, Siena, you are wrong to think everything that can be has already been invented But you’re entitled to make mistakes at 12, just as I did in thinking I would go to the moon Because the future always holds great promise and it’s the downpayments we make on it today that decide how much of it we can realise AUTHOR’S NOTE xi businesses - Google, Apple and Facebook - about their inability or unwillingness to penetrate these communications Legislation is on the way (and Australia is leading the charge on this) but it will only work if its universal (and that is unlikely) The risk is that it drives the terror organisations into new and even more inpenetrable communications channels ISIS’s own communications are heavily encrypted but its capacity to damage individuals who lack the security measures of government is well established Innocentlooking emails capable of hacking online identities (and that means access to poorly protected bank accounts, private corporations and government entities) are part of the ISIS armoury Perhaps the most powerful weapon is its use of the internet as a propaganda tool to create fear Video of hooded westerners being beheaded is now a regular feature of prime-time TV news It’s professionally shot and distributed to the world through YouTube But many of the videos (not all) are fake, using actors and clever filming techniques Real or fake, they have the intended effect as ISIS threatens to stage similar executions in the downtown areas of major cities It’s innovative use of technology, designed to disrupt the freedoms many of us value Other, more conventional, uses aren’t so much a threat to our freedoms as a threat to the certainties we have lived with As in most things, I fall on the optimistic side of where this will go, trusting the human instinct to mainly pull back from the brink when confronted with threats I can’t see a future where we foolishly allow automation to 212 WAKE UP create mass unemployment, 24/7 monitoring of everyone’s activity or dedication to living our lives through screens at the cost of face-to-face human interaction Will there be more automation, monitoring and ‘virtual’ connection? You bet How much depends on how much we as citizens are willing to bear before we say no And that depends on how we weigh up the wins and losses of what has been and what is to come Here’s my evaluation: Hashtag Wins Losses #RealityBites Smart, new businesses Old businesses bankrupt #InTouch Continual connection Less privacy #InMotion Efficiency Less quiet contemplation #Fit4Purpose New medical discoveries Higher cost of ageing #Learn4Life More access to knowledge Loss of curiosity #CustomerFirst Better served needs Instant gratification addiction #ShopTilYouDrop Instant availability Consumption trumps saving #AlgorithmsOfLife Choices guided for us Less creativity #ARobotAteMyJob Higher productivity Job losses CONCLUSION: THE MORAL OF THE STORY 213 To the extent I can choose, I would happily take a mix of the wins and losses In fact, surprise, surprise, I would take all the wins if I could limit the losses And this will be the challenge we face – how in this new world we can protect our privacy, tendency to squander time and money, our jobs and still manage to fund the higher demands we collectively place on businesses and government The answers lie in how we manage the wins to reduce the losses (because we can’t have all of one without the other) And this is a consideration largely absent from political and public policy debate anywhere in the world Sure, there are lots of discussion papers, consultant and thinktank reports but no concrete social strategy for handling change in a digital world Ironically, the political shocks of late 2016 and 2017 while looking like a step backwards for progress might provide the incentive for politicians and governments floating comfortably down the mainstream to take a lead in how we want our society to look through the 2020s and beyond All the shifts that have taken place favour governments acting to protect the ‘little people’ most vulnerable to technology shock There’s a signal here that politicians and corporations are foolish to ignore Even free marketeers (and I’m one) have cause to be dubious about the concentration of decision-making and trendsetting in new corporations that have grown quickly from nowhere without any commitment to the social cohesion that goes with mass employment and paying taxes Through 2017, there has been more and more 214 WAKE UP questioning of how some of the corporations I have described in the previous pages behave and whether they are the corporate leaders we want to guide our lives Uber, a brilliant service provider, has seen its CEO forced out and desertion at board level due to concerns about corporate culture Many of its drivers have turned on it because of the high proportion of fares it takes and there has been public questioning about its genuine viability, given its thirst to continually raise capital, rather than build it from earnings (If you don’t know about this, ask any cabbie They know it chapter and verse.) Twitter has become a graffiti wall for most of the abuse of the world The World Jewish Congress analysed antiJewish posts on social media and found 63 per cent of them were on Twitter The Airbnb model is under question around the world – not just from hotel owners concerned at the loss of bookings but from home owners concerned that they aren’t sharing their block with neighbours but with passing travellers New York City is among the destinations to impose a minimum stay on Airbnb bookings but apartment blocks are making their own rules (Our family spent late 2016 in a lovely apartment in Hell’s Kitchen, Manhattan, but we were to be the last guests as the body corporate had decided to stop owners renting.) Amazon, Google and Apple are in continual tussles over tax payment and continue legal actions to protect their ability to shift profits to low-taxing countries (This CONCLUSION: THE MORAL OF THE STORY 215 is not just a new economy hallmark but it has been refined by the new technology-based businesses.) Even Deliveroo, the Uber-like food delivery business, is facing credibility issues, accused of using its rising market power to exploit restaurants, of underpaying its cyclists and encouraging them to run red lights and break traffic rules to meet delivery deadlines There will be more of this as the new economy corporations lose their sheen (and market capitalisations) and we all become more alert to the risks of where the bright, shiny things they offer can lead us And inevitably, on the current trajectory, there will be support for governments to get their houses in order and intervene to what they are elected to – run nations efficiently and equitably The moral here isn’t to take a Luddite approach to the technology but to make sure we take a measured approach to its application And that applies to the technologists, their businesses, the regulators and we consumers who can balance ethical and economic decisions Unfettered market forces have never worked (And, if you doubt that, check out what caused the Global Financial Crisis, the tech crash of the late 1990s, the share market crash of 1987, and all the way back to the tulip bust of 1637.) I’ve spent more time in the world I describe than I could have imagined – as a consumer, newspaper and website editor, higher education executive and company director I’m not a technologist but I have spent my lifetime trying to understand and then write about human 216 WAKE UP activity and its impact on business and politics, which is why I keep returning to the human role in this developing story Particularly, what can we as individuals do? The good news is you’re already doing some of it by reading this guide to what is happening But engaging more actively with technology, if only to better understand it, will at least allow you to decide for yourself By reading, listening and playing with the technologies on offer you can discover what is possible on different platforms Try creating your own website or write a blog, but remember the golden rule – only publish what you would say through a megaphone Embrace learning through books like this or remember Chapter 5: #Learn4Life and try a MOOC – there’s a whole world of opportunity out there to accommodate just about every interest and a lot of it is free Use the technology to shop or buy and then share what you find interesting And of course, be prepared to fail You will make mistakes like thousands of others but remember why it matters The world is changing and informed individuals are at the heart of forcing good public policy, which is unfortunately lacking in this area You can also consider investing Get a feel for how online ventures work by trying sites like Kickstarter.com, which crowdfunds thousands of small businesses and creative endeavours The hashtags in this book are a means of identifying the trends that have mattered over the past decade Everything that has fallen under these hashtags had its seeds planted when the fabled Jesus fell into his coma in CONCLUSION: THE MORAL OF THE STORY 217 2004 They could have served as warning signs for those willing to apply some knowledge, spiced with imagination and analysis And they still if we want to protect the lifestyles and behaviours that make this an exciting era to be part of The seeds are planted if we care to be alert to them The hashtags #RealityBites, #InTouch, #InMotion, #Fit4Purpose, #Learn4Life, #CustomerFirst, #ShopTil YouDrop, #AlgorithmsOfLife and #ARobotAteMyJob aren’t going anywhere In fact, they’re more relevant than ever All we have to is WAKE UP 218 WAKE UP REFERENCES My thinking on digital disruption has been formed by my own experience, hundreds of conversations, newspaper and magazine articles, radio broadcasts and dozens of books The Economist magazine is very good at highlighting what’s new So is Wired, The New Yorker, The Atlantic and Business Insider The following newspapers, both traditional and digital, have also helped: The Guardian, Financial Times, The New York Times, The Wall Street Journal, The Huffington Post (now HuffPost.com) There are a number of online blogs and articles you will bump into easily once you start looking and the following websites are particularly useful for anything related to technology: • • • • • • TechCrunch.com Salon.com Forbes.com TechRepublic.com Gizmodo.com qz.com REFERENCES 219 I have directly quoted from some of the books on the list below, while others have helped shape my thinking, and I recommend anything by Michael Lewis, who has written profusely and profoundly on how technology and modern business intersect • Brynjolfsson, Erik and McAfee, Andrew, The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies, W W Norton & Company, New York, 2016 • Christensen, Clayton, The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail, Harvard Business School Press, Massachusetts, 1997 • Clark, Duncan, Alibaba: The House that Jack Ma Built, Harper Collins, New York, 2016 • Davenport, Thomas and Kirby, Julia, Only Humans Need Apply: Winners and Losers in the Age of Smart Machines, Harper Collins, New York, 2016 • Duhigg, Charles, The Power of Habit: Why We Do What We Do in Life and Business, Random House, New York, 2014 • Forsyth, Mark, The Elements of Eloquence: How To Turn the Perfect English Phrase, Icon Books, London, 2013 • Isaacson, Walter, The Innovators: How a Group of Hackers, Geniuses and Geeks Created the Digital Revolution, Simon and Schuster, London, 2015 • Jockers, Matthew and Archer, Jodie, The Bestseller Code: Anatomy of the Blockbuster Novel, St Martin’s Press, New York, 2016 • King, Madonna, Being 14: Helping Fierce Teens Become Awesome Women, Hachette, Sydney, 2017 • Lucas, Henry, The Search for Survival: Lessons from Disruptive Technologies, Praegar, Santa Barbara, 2012 • Mitchell, Chris, Making Headlines, Melbourne University Press, Melbourne, 2016 220 WAKE UP • Schwab, Klaus, The Fourth Industrial Revolution, Penguin, London, 2016 • Seabrook, John, The Song Machine: Inside the Hit Factory, W W Norton & Company, New York, 2015 • Susskind, Richard, The End of Lawyers?: Rethinking the Nature of Legal Services, Oxford University Press, Oxford, 2010 • Thaler, Richard and Sunstein, Cass, Nudge: Improving Decisions about Health, Wealth, and Happiness, Yale University Press, Connecticut, 2008 • Topol, Eric, The Patient Will See You Now: The Future of Medicine is in Your Hands, Perseus Books Group, New York, 2015 • Wiener, Norbert, The Human Use of Human Beings: Cybernetics and Society, Da Capo Press (New Edition), Massachusetts, 1988 REFERENCES 221 ACKNOWLEDGEMENTS This book draws on bites (indeed bytes) of knowledge and experience acquired over decades But it wouldn’t have been written without the support of Professor Peter Coaldrake who gave me the space and encouragement to use that experience to better understand and explain how the world is changing That has come to life at the Queensland University of Technology through the Real World Futures program, which has opened my eyes (and hopefully yours) to what is happening Dozens of conversations with Professor Peter Little about these issues have also informed me and guided me on where to look Within the university, I also acknowledge the wisdom of Professors Carol Dickenson, Arun Sharma, Marek Kowalkiewicz and Michael Rosemann, and the day-to-day support of Kathy McCabe But my education did not start there What seems like a lifetime-and-a-half in the news business started me on this particular journey and I remain grateful for the opportunities and guidance afforded by dozens of people ACKNOWLEDGEMENTS 223 wrestling with the same issues in News Corporation, including Rupert Murdoch, John Hartigan, Kim Williams and Jerry Harris and my many journalistic colleagues, particularly Michael Crutcher, Scott Thompson, Sue McVay, Lachlan Heywood, John Grey, Neale Maynard and Chris Jones Like me, many of them have now gone from the media business The process of writing this was helped by insightful commentary by a group of people (my own focus group) They are: Sue Carson, Jamie Walker, Ray Weekes, Brendan McLearie, Paul Lucas, Richard Moore, Kay McGrath, Rebecca Levingston, Jeremy Santolin, Cratis Hippocrates, Ian Eckersley and Chris Sturgeon I started to write this as a resource to help me prepare presentations to business groups on digital disruption and it might have stayed a personal resource if not for the support of that great Brisbane institution, The University of Queensland Press Its publisher Madonna Duffy saw the potential of the manuscript and put it in the hands of an editor I admire, Jacqueline Blanchard, who massaged and worried it to life And, most of all, I acknowledge the support of my family Daughters always ground you and I am blessed with three of them – Rebecca (whose experience is the starting point of Chapter 3), Madison and Siena I’m buoyed by a supportive and loving wife, Madonna King, who encourages most of my adventures and, in this case, coats them with her own experience as an author of seven books #Prolific 224 WAKE UP First published 2017 by University of Queensland Press PO Box 6042, St Lucia, Queensland 4067 Australia uqp.com.au uqp@uqp.uq.edu.au © David Fagan 2017 This book is copyright Except for private study, research, criticism or reviews, as permitted under the Copyright Act, no part of this book may be reproduced, stored in a retrieval system, or transmitted in any form or by any means without prior written permission Enquiries should be made to the publisher Cover design by Josh Durham (Design by Committee) Typeset in 11.5/15 pt Adobe Caslon Pro by Post Pre-press Group, Brisbane Printed in Australia by McPherson’s Printing Group, Melbourne Cataloguing-in-publication data is available at http://catalogue.nla.gov.au ISBN 978 7022 5986 (pbk) ISBN 978 7022 6076 (pdf) ISBN 978 7022 6077 (epub) ISBN 978 7022 6078 (kindle) University of Queensland Press uses papers that are natural, renewable and recyclable products made from wood grown in sustainable forests The logging and manufacturing processes conform to the environmental regulations of the country of origin Wake Up David Fagan has lived and breathed the digital revolution for almost two decades – first as editor-in-chief of The Courier-Mail, designing and driving one of the biggest online news sites in the country, and now as Director of Corporate Transition and an Adjunct Professor of Business at the Queensland University of Technology In this role, he uses his breadth of experience to run the Real World Futures program, which is dedicated to exploring and explaining how digital disruption is changing how we think, work and live The Brisbane-based father of three is also a convert, of course, to Uber, Airbnb, social media, online shopping and drone racing ... #survivor 16 WAKE UP #REALITYBITES History is littered with the corpses of deniers – those who thought they were safe from the ravages of weather, the madness of invading armies or the forces of technological... with my take on the most famed and one of the earliest casualties of disruption Look back into the late 19th century and you’ll find another period of disruption, now described as the Second Industrial... in the ‘second half of the chessboard’, these hashtags will have digital as well as physical life Follow them on Twitter and you need never be surprised again These nine hashtags cover most of