Technological change and the consumer wants, needs and habits that come with it will happen faster than anticipated, technology strategist and futurist, Steve Sammartino, told the MotorOne Breakfast audience at the AADA National Dealer Convention on Wednesday.
In an entertaining and informative session, Mr Sammartino predicted that the rapid pace of technological change would mean that within a decade petrol-powered cars would no longer be available.
He cited Moore’s Law of computer processing, which states that every 18 months, the processing power of microchips doubles while the size halves.
“Things are about to grow quicker than we expect,” he said.
“From the industrial, factory world, things grow slowly, because it’s concrete, it’s steel. But in the digital world, we double the amount of information and share it out much quicker.”
Mr Sammartino brandished his smartphone as an example of how quickly technological change happens.
“You’ve got NASA in your pocket. This is NASA. There was no computer in the world that had as much power as this phone, in 1985,” he said.
“It’s not even a phone, is it really? It’s a supercomputer, isn’t it? And who got their supercomputer for free? Everyone? Everyone got their supercomputer for free, everyone. Because remember in 1999 when you had a Nokia brick, and you had to put in a trailer to take it with you to work? That was a phone that could only make calls and maybe send a text, and it was $59 a month. And now you’ve got a free supercomputer attached to your phone, and it’s $59 a month.”
Mr Sammartino predicted the same thing would happen with the change from fossil-fuel powered vehicles to electric cars.
“It’s actually going to happen quicker than people think, because the business model changes when we go to electric cars. You know what the business model is – it’s the same as the phones. You take your petrol money and that funds your car. The average Australian spends, what? Three thousand a year on petrol? So as soon as an electric car’s $30,000, you go into a brand-new car, because you take your petrol money and fund the electric car – like that – it’s like dumb phones to smart phones, it’s going to happen quicker than everyone thinks.
Mr Sammartino said we are moving towards the adoption of The Internet of Things, with every appliance connected to the internet – forming the ‘Trillion-Sensor Economy’.
“We’ll do it because technology is that cheap. One gigabyte of memory: $20,000 in the year 1990. Twelve dollars in the year 2000; now it’s three cents, it’s cheaper than the packaging it comes in. So, we’re going to attach the technology to everything around us; it’s already well underway.”
Mr Sammartino said that business models had to change along with technology, and business own needed to realise they were in the problem-solving business, not the product-selling business.
“Coles and Woolworths are still in the business of solving their own problem. They are not solving the problem of their customers any more. They are utilising their infrastructure to force people down a path that suits them, not the customer,” he said.
“When new technology arrives, customers can have their problems solved in different ways. That’s what technology does. It helps us solve problems in different ways. The business that we are in is the problems that we solve, not the products that we sell. The products that solve people’s problems change; we have to change as well.
“What business are you in? You’ve got to really ask yourself. It sounds like a simple question, but it’s the most poignant question we need to ask.”
Where formerly production and consumption were separate processes, now the two were merging – most notably in the case of Apple opening its App Store to development by consumers, generating new revenue streams, better products, greater customer satisfaction and engagement.
Yet in a world increasingly able to operate without human intervention, the world’s most successful company – Apple – also employs more staff per square metre in its retail stores than any other company. The more technology advances, the more people appreciate the personal touch, the human side of things.
“It doesn’t matter how high-tech the world is, you want a person to explain it to you. We don’t connect with technology, we connect with people. Apple do it; this is how they get $2000 for something that should cost $500. I’m serious. (We say) ‘Can you solve my problems because I haven’t got a clue’. ‘Don’t worry, we’ve got it, we’ve got this, we’re going to get you sorted’. You walk out and your shiny piece of plastic is working and you’re happy. It’s a trick, based on humanity. The most important thing to us is our connection.
“If you want to survive in technology, it’s not about technology. It’s about the honesty and the humanity that lives on top of the technology.”