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Industry 4.0 The Opportunities and Risks of Disruptive Innovations

The Thumb, Flying Villages

and Floating Cities

Barkawi Management ConsultantsMunich • Atlanta • Moscow • Shanghai • Vienna

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A driver gets into his car, enters the destination into the navigational system, and off he goes. He

turns his comfortable seat around, because that’s where his children and wife are seated. Now that game of monopoly can finally begin! In the past, long car trips were a source of torment and stress for all parties, while the noise coming from restless children sitting in the back seat just added to it. Today, only the change in ownership of the coveted Board walk property produces such great fanfare.

Instead of playing Monopoly, commuters and car-pool members can work or relax during their daily commute to work, instead of remaining idle as a driver and having to pay full attention to stop-and-go traffic.

“This is how nice traveling can be!“ is what many car owners are thinking, especially those who are already wishing for widespread utilization of driverless transport systems, because in this new world: there are fewer traffic jams, no rear-end collisions, and no stressed-out fathers behind the wheel.

Driverless Cars: Opportunities and risks for previous business modelsBut as so often in life: One person's joy is another person’s suffering! The future is now, and in the near future, driverless transportation will make the current business model for auto- mobile insurance obsolete, and the traditional insurance policy which insures the driver will cease to exist. Because: A driver who does not drive does not need to be insured. In the future, the automobile itself will be subject to a manufacturer's product insurance, which the manufacturer itself will probably offer. Policy holder liability will become manu- facturer liability in such a way that traditional insurance companies are already scratching their heads at this prospect. They are already asking themselves what will remain of the current auto- mobile insurance industry with revenues of EUR 24 billion dollars.

In addition: Swiss-Re expects there to be a

Industry 4.0 Opportunities and risks of disruptive innovation

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70 % decline in the number of accidents by 2035 – good for the driver, bad for business.

Some new technologies have already proven to be disruptive and pose existential threats to existing products, companies and even business models: The DVD completely replaced the video cassette and all peripheral devices such as video recorders, the iPod made the CD, CD players and the Walkman obsolete. Buying music as a whole CD in the store became history with iTunes, file sharing and streaming subscriptions. Since then, the music industry has been fighting permanently declining sales and is still searching for a viable delivery concept.

Other products and sometimes even entire indus-tries have suffered worse; they were eliminated through the introduction of innovations and dis-ruptive technologies: Cameras and the neces-sary films were suddenly an anachronism in the age of digital photography; the Kodak Company, for example, thus experienced an existential crisis.

The small app “Whatsapp“ meant the end of SMS and its status as easy money for phone providers that had already been looking for a re- placement for the former SMS cash cow.

The days are also numbered for products like the dictation device or the compass since the launch of multi-functional smartphones, to name only a few examples. In many professions, it is already foreseeable that they will completely disappear from the scene.

Truck driver, carpenter, printer, doctor: Professions without a future?Futurologists are in absolute agreement that jobs relating to the paper industry – such as postal couriers or print shop employees – will decrease in number. The demand for paper products will further decline in the coming years because more and more people are reading their news on smartphones or tablets.

Businesses will produce less catalogs as customers prefer to use online shopping platforms. In addition, in the future people will hardly ever write letters because they rely on messenger apps and social networks. But other professions will also be drastically changed: Driverless trucks will no longer require traditional truck drivers, fully automatic wood processing machines will eventual-ly need no carpenters for the production of furniture, intelligent health care diagnostic apps will deliver laboratory results via an implant and laboratory technicians and doctors will be at least somewhat replaced, onlinelearning will present knowledge in a totally new way and a large portion of teachers and professors will become redundant, to highlight just a few selected examples!

But innovation does not only produce risks; there are also opportunities, as long as we do not fight the inevitable changes and allow ourselves to accept the promising new areas: For instance, automobile manufacturers who are concerned about the future declining sales figures as a result of the share economy, can introduce new sales markets in the

insurance products described above. Mercedes as a future major player in the world of insurance? Why not?! BMW as the future operator of a pay-as- you-go car fleet and pioneer of the share economy? A shared vehicle for multiple users instead of selling individual vehicles to many driving enthusiasts? In many large cities of the world, this is already the reality – and a growing trend!

Beautiful new world of products: Flying Skateboards and Interconnected Implants

The visions are partially fantastic and sound more like Hollywood than reality. In addition to driverless cars and “flying“ skateboards, there will be interconnected implants in the healthcare sector, such as the eye lens, which constantly monitors blood sugar and sends the updated data to your mobile phone – a benefit for every diabetic!

Drones will deliver packages and spare parts, floating plat- forms offer new living spaces. 3-D-printers are used to print food and organs.

The energy sector will experience a bit of turbulence through small fusion reactors and many far-fetched ideas from films such as “Back to the Future“ will become a reality – however, not always to the delight of the current top dog of the respective sector.

Countless innovations are currently in different stages of maturity and life cycles: Sometimes the product is already fully developed, market-ready or already available, such as the “Google Glass“ glasses, or the intelligent contact lens. Other products are under development, but it is clear to see in almost all: They will exist in the future! Sooner or later.

Many a company that today dominates a market with a product that is soon to be obsolete in the future will, in the best of cases, only be buying some time. To adapt proactively to disruptive technologies, but it is existential. The battle against new development with requests for legislative bans, patent disputes and other blocking positions, as for example with the taxi services provider “Uber“, will not impede progress in the long term!

As seen in the example of genetic engineering and embryonic research, companies, scientists and technologies faced with hindrances of this type will simply relocate abroad, and the over-regulated locations are left simply hi and dry by this.

3-D-Printed Organ Credit: www.biofab.com.pe

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Five Big Mega Themes - the vision of the future!

1.Digitalization, Autonomous Machines and Robotics

3. New Ways of Life

5. Augmented Reality & Entertainment Technology

2. Innovative Transport Logistics

4.New concepts to combat energy and resource shortages

The most important terms for this topic are “Big Data“ and “Internet

of Things“. The rise in increased net-working of devices to each other and among each other, such as the refrig- erator with the mobile phone, the mobile phone with the car, and again the car with the workplace, the mobile phone with the Internet via Amazon, Face- book, Google, etc. creates an incredible amount of data. Consumption and consumer data, movement data, and much more will in the future con-tinue to generate and analyze data more rapidly and more extensively with applications and implications that we still cannot even begin to imagine.

Internet of Things: The refrigerator organizes the beer for the World Cup Final

Individual devices become more intelligent, the net-working of devices as part of the “Internet of (every)Things“ will – in addition to many terrible visions of transparent consumers – also lead to many innovative applications: The internet-enabled

Mega-Topic Number 1: Digitalization, Autonomous Machines, and Robotics

The collection and compilation of the currently most interesting ideas provide incredibly different, innovative and sometimes crazy approaches. This allows for the creation of five big clusters around which the music of the future will play:

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refrigerator will of course “know“ the football finals schedule and send a warning notification to the owner on his mobile phone that there is insufficient beer inventory within the refrigerator, or the refrig- erator may even autonomously make the order for beer and hot dogs because the decision was made based on the weather forecast and historical consumption habits of the owner's consumer profile.

The networked home, or as we now say in Germany “Smart Home“, which is linked by mobile phone to an infinite number of other applications such as the

heating and air conditioning, makes it possible for commuters to arrive home to a cozy, warm apart-ments without having to run the heater for the whole day.

This networked data will by and large run through huge servers as well as through small personal control center servers: We are controlling our houses and apartments more and more, our entire lives in fact, with the “remote control in our pants pocket“ – the smartphone!

Using remote controls of all kinds, things have been set in motion, which so far have been controlled by people – with all the pros and cons: The networked car will be self-driving and offer more security through electronic control and networking in relation to traffic congestion, accidents and repairs – more than we are accustomed to today.

Your colleague Mr. Robot takes over the jobRobotic ships will also be driverless, and will operate as unmanned fleets only by computer at sea and loaded with copious amounts of goods, self-propelled, autonomously set their course and optimize wind, weather, fuel consumption, etc. accordingly. Self-driving ships help solve the problem of skill shortage and cost efficiency on the high seas!

But not only in this industry will robots increasingly be replacing human work: For example, robots are already being tested for carrying out simple work for care of the elderly such as bringing food trays or heavy physical work such as lifting patients into and out of bed which relieves nursing and care staff unload and replaces the missing work staff in these areas.

Small electrical fur-seals help as “Petting Robots“ for lonely, demented patients. Day and night scream- ing baby dolls serve to simulate real life and help in the fight against early teenage pregnancies.

Drones save human lives and clean skyscrapersThe rescue drone is a combination of “help for humans“ and futuristic Hollywood vision, particularly in the highly densely populated urban areas with permanent traffic jams above which this life-saving robot assistance will be flying:

A man has a heart attack in the inner city. The paramedics are alerted, but still require at least 25 minutes for commuting because the city is always completely grid-locked with traffic at rush hour and in that time the patient would be dead. The rescue control center now sends a rescue drone with a radio communication module and instructs the helping passerby who is on site with the patient how to use the life-saving defibrillator or adrenaline syringe which had just been delivered by drone. Once the ambulance arrives, the patient has a stable heart beat and can now be seen by a medical specialist in-person.

The application possibilities of drones are diverse and will dominate many new areas: In the future, “com-mercial drones“ will be tasked with the window- cleaning of high-rise buildings: In large cities with high heat during the summer season, people will no longer be endangering life and limb, on hot panes with external temperatures of more than 120° F (approx. 50° C). The little brother of this industrial cleaning robot, vacuum cleaning robots for apartments and cleaning robots for swimming pools have already been in use for many years.

Many other kinds of cleaning and working robots and drones is very conceivable. And they are completely new applications, such as already envisaged for spare parts supply delivery by drones, as well as transports of drugs, vaccines, food etc. even in remote or dangerous areas.

In particular, the combination of delivery capability, communication via the internet, and drone opens up undreamed of possibilities, because even unskilled persons can be instructed to complete repair on a device, carry out simple interventions or even provide help for a medical emergency.

That drones can deliver packages in the future is now a reality and from a certain perspective this fantastic future vision almost appears banal.

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Transitioning from the “digitalized, autonomous systems“ theme, such as robots and drones, to

the topic of “transport and logistics“ is indeed fluid. The combination of networking of agents and entities such as across the internet, companies, suppliers, customers, and private individuals will become attractive new services in a world strongly driven by consumer demand and in particular the so-called “last mile“:

Amazon includes the logistic services of private individuals into its project “On-my-way“. The idea is that individuals register as couriers and when they are traveling a distance anyway – for example to work – and could deliver or pick-up a package for an end customer quickly and without much effort for a little pocket money. And this is just the beginn- ing of innovation and new things happening on our streets!

The highly sought after mapping software “HERE“ from the Nokia company is developing self-driving cars in cooperation with the buyers consortium representing Daimler, Audi and BMW which would also be interesting for those taxi transport providers defeated by “Uber“. In addition to competing with traditional taxi businesses, Uber also plans delivery and logistics services for the “last mile“ through its network of private operators. Self-driving cars would be a great support for this service!

In the beginning of August 2015, the three German car companies completed a purchase, in the amount of EUR 2.8 billion, of “HERE“ outbidding the company Uber, a company which also brought a great deal of cash to the negotiating table. Simply taking into consideration the high amount which was brought to the negotiating table demonstrates the hope, perspectives and of course of the business prospects: Self-driving cars are the future, and with the corresponding mapping and navigation software, they would not only be a blessing for blind people who would gain in mobility but would

also be a boon to the eternal jams on motor-ways and in city centers, because self-driving cars would result in accident-free traffic. And, of course, one of the most innovative companies in the world is also thinking the same thing: Google is also working at top speed on a personal vehicle and has announced the production of a series vehicle starting in 2019! Because one thing is clear to everyone: This is where “Big Money“ will be made in the future!

Worldwide access to internet – on the ice cap at the North Pole and in the middle of the Sahara

With drones and balloons equipped with state-of-the-art technology, the Internet continues to develop its way into the remotest of areas on the planet and supports – through worldwide access to knowledge and education – the fight against hunger and poverty.

Children in remote villages in India or throughout the continent of Africa learn to read and write as well as arithmetic through the use of the internet and possibly even university studies, as the next school or university may be miles away. In these situations, floating drones and balloons with the corresponding internet technology have long been a very specific part of the conversation.

Project LOON from Google aims to bring internet everywhere, with balloons floating over 12 miles high in the sky – far above the weather – and much cheaper than satellite internet connection! The first commercial offers are already planned for the year 2016.

Fiber optical cables buried underground are a thing of the past. This enables Internet on any island, in the middle of the desert, on ice packs and on the open sea. The latter is an important design criterion for human life on water, i.e. as in “floating cities“! But more on this as part of the topic of “New Ways of Life“.

Besides drones and robot ships, driverless cars and trucks, there are other transport vehicles which will be part of our future: New, enormous zeppelins carrying heavy loads of 500 tons and thus weighing twice as much as the largest transport aircraft will complete goods transport from point A to point B – and carrying 500 tons is only the beginning!

Whole wind turbines will be easily deliverable, even in places where no roads exist. Already today, Blimp Cargo Vehicle, the world's first super zeppelin, is able to transport 66 tons of cargo 137 meters from its starting point to destination and back to its starting point without needing a runway strip for take- off and landing, floating over uninhabited areas.

Mega-Topic Number 2:

Innovative Transport Logistics

Credit: DHL

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A floating hospital in an airship saves lives in war-torn areas It is also conceivable that these zeppelins will also be able to float over highly inhospitable areas for months and provide a temporary home with urban infrastructure to engineers. Also, a floating, fully- equipped hospital in a war zone ensures that people on-site can be supplied in a different manner than is possible today.

These air ships will be independent from today’s fossil fuels because other concepts such as solar and wind energy easily and autonomously supply the energy needed for propulsion.

Solar-powered aircraft, which no longer require kerosene, so-called “solar planes“, already exist as small-size aircraft. These small aircraft will one day be feasible as a large transport and passenger planes and thus ensure mobility of the masses without the high price of devastating the natural environment.

Initial approaches already exist: Airbus wants to put its small electric aircraft E-Fan 2.0 in series production. The 23-feet (7 m) tall aircraft weighs a good 1,100 lbs. (500 kg), and takes off at 62 mph (100 km/h). That is the result from testing of flights which has been occurring for more a year now.

Currently, the biggest problem is still the low range of flight distance. Batteries must be as small as possible to ensure the take-off mass does not become too high. For this reason, the E-Fan must land after a very brief three-quarter of an hour flight before the power is drained. The aircraft can only reach a speed of 100 mph (160 km/h) but neverthe-less can function as a shuttle flight, for example, for islands or for other short transport routes.

The E-Fan 4.0, the further development model of the above 2.0 can seat three passengers in addition to the pilot. Solar energy, besides offering ecological benefits, provides independence from refueling at fixed locations which have the corre- sponding infrastructure. Currently, the biggest problem is an acceptable energy storage medium in terms of size, weight, and cost efficiency, because any type of conventional battery is still too large, too heavy, and too expensive.

But that will change, and then solar aircraft will be taking flight for passengers as well as goods trans-port and logistics in a big way!

The Next Big Thing: Innovative Battery TechnologyThe next major step in electric mobility on water, on land, and in the air is therefore quite clear: battery technology. The highly innovative company TESLA, with the undisputed best electric vehicles in the world, is working feverishly on this issue and is constructing a mega- battery factory in the middle of the desert. Elon Musk, founder and visionary thinker of TESLA, would also soon make it possible for households to be powered without their local power company through installation of a large battery which costs approx. $3,000. Great hopes in the world of science are being placed in the concept of redox-flow batteries.

With the word “Battery“, countless technical inno-vations for cars, ships, aircraft for are waiting on an innovation that makes battery technology easier, more efficient, and cheaper. If this long overdue step succeeds, there will be an avalanche of new applications!

Transport and logistics approaches to the future go in yet another different direction: For logistical supply to a constantly growing humanity parallel to the impending collapse of transportation systems, the project planning for “Hyper-Loop“ should offer a turbo-fast pipe solution: It is a futuristic-looking concept for a high-speed transport system, which should provide electrically driven transport capsules for passengers and/or

goods with speeds of up to 745 mph (1,200 km/h) on air cushions through a vacuum tube which means there’s practically no air resistance. Again TESLA founder and battery pioneer Elon Musk is spearheading and driving the project.

The concept of “CargoCap“ is based on an under- ground alternative to above ground delivery logistics. Comparable with the good old tube post systems (pneumatic post delivery), large quantities of goods are moved on pallets through an underground pipe system. CargoCap is conceptualized for goods trans-port in urban areas in a local area of up to 150 km for fast, efficient, jam-free delivery around the clock, the underground supply logistics should be fully auto-matically optimized.

In particular the mega-cities must secure supply to millions of people, companies, etc. through concepts such as these to ensure that in just a few years the inhabitants of big cities do not suffocate in smog, over-population, and traffic jams, which in turn paralyze the economy. The logistics supply of companies and factories, for example, secures jobs and thus prosperity and social peace; therefore, its use and impact cannot be overstated.

Credit: CargoCap

Credit: Aeros

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In many countries of the world, there

are two effects which coincide and mutually reinforce each other: On the one hand, many societies have been aging for many years – as is the case already in Japan and Germany. The birth rate is low, the successor generations are missing unless future immigration and well thought-out concepts provide balance to this problem. Older people are moving more and more into the inner cities due to availability of medical care, the cultural opportunities, and community. On the other hand, the labor force is also moving into the cities because that’s where the jobs of the future will be.

Here, housing shortages will increase sharply, cities will grow into mega-cities, urban areas will be growing together to create monstrous urban areas. For example, the Ruhr area in Germany with its many individual cities will grow into a mega city within a few years as is already the case in the area of Tokyo with approximately 30 million inhabitants. Due to the aging population, the labor force will experience shortages as well as the housing based on immigra- tion influxes. Both problems are getting worse

Mega-Topic Number 3: New Ways of Life

because the influx of people from other countries that are of working age requires modern housing, urban spaces, and living concepts. Conclusion: Without intelligent concepts, cities are bursting at the seams.

The largest portion of the 510 million square kilo- meters of our earth is void of people and most importantly: it’s wet. 71 percent of our planet is covered by salt water. These areas will perhaps one day be necessary as settlements for an exploding humanity.

In US metro areas such as San Francisco with its extremely high demand for well-trained young people and with housing shortages as well as highly restrictive immigration policy, concepts have been considered for many years as to what other urban living spaces can be developed.

Floating cities in the sea directly in front of the city would offer quite a few advantages, and two in parti-cular: There is space and smart Indian programmers could live and work there without a green card!

A very concretely planned first step in this direc-tion has been taken with the project “Blueseed“: At a distance of 19 kilometers, this luxury boat anchors off the coast of California and should

therefore be out of range of American immigration authori-ties. “Blueseed“ will soon provide over 1,000

brilliant minds from all over the world a floating home, “Silicon Ocean“ would be the beginning! The way to floating mega-cities of the future, which is currently only available as a draft on the drawing board, is no longer that far out:

These “floating cities“ are hosts to complete urban infrastructures from companies and jobs to homes and green parks, a hospital, maybe even with home-grown vegetables for autonomous power supply without delivery delays.

In regards to the emergence of clearly defined as well as temporary and dedicated communities of “floating cities“, permanent human settlement of people through to the development and formation of new countries and new political systems is possible.

Printed clothes, printed food, printed spare parts characterize a new world! 3-D-printers will be a technology which develops into many areas of life and support autonomous supply: Printed clothing is manufactured on site, printed food, printed spare parts characterize a completely new life! The brand fetishism of the present generation which provides many busi-nesses with a good living will certainly change, if perhaps high-quality 3-D-printers can print a silk sweater on site while simple 3-D-printers print a cheap acrylic sweater – is this the differentiation of

Credit: Blueseed

Credit: Flickr

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the future and the brand labels of large company brand labels? There should be more labels in the world than just Chanel & Dior! Floating cities and their inhabitants will develop their own needs, require new supply concepts, and establish other trends. But above all, trends will be established faster than the major labels can respond.

The speed of changing trends will – not only, but also by 3-D-printing technology – be further increased, so fashions will change at a breathless pace, and the response times of companies will to continue to decrease. For decades, the fashion scene was limited to two collections per year – a summer and winter collection. Designers worked meticulously for months and in secret until the first pieces floated onto the catwalk.

The major fashion chains of the pedestrian zones and “High Streets“, the H&Ms in this world, have a different strategic concept and no longer do this work: These companies mercilessly mimic and copy fashion shows of luxury labels as well as street style and are therefore in a position to act and respond significantly faster than the major fashion brands.

A Mango customer wears a copy of the Chanel dress oftentimes before the handmade Chanel original can be delivered. Understandably, this does not always delight the original purchaser. With 3-D-printing of clothing, this trend will be exacerbated again and bring some brands into trouble!

Not only fashion runs a race against time Zara, Mango & Co. bring between 10 and 20 new collections per year into their fashion retail shops, not just two per year! This means that every two weeks at the very latest a completely new collection is hanging in shops. Through 3-D printing of clothing fashions will change even faster in the future. Previously, only insiders were able to see that an outfit came from last season’s collection. Today, a trend is often already over after only a few weeks.

At the end of 2014, for example, the neon colors revival was over after only a very few weeks and after that, the colorful pieces hung like lead in shops. Still, in the sluggish supply chains of the not so flexible providers at the beginning of 2015, there is still a lot of neon supply available, although there are no customers for this supply in the foreseeable future.

Selling this supply at a loss or even destroying large parts of every collection is now the order of the day in many companies. The yields of the manu- facturers are null, some even going bankrupt on this account. In addition: The inflexible value chains of the present are at fault for the destruction of valuable raw materials, local markets in third- world countries are destroyed by the prosperity trash of the first world, which in turn leads to unemployment, hunger and – now visible – a massive influx of refugees. The latter contribute to increased problems in all the major cities of the world: This is how the mega cities of the future will come into existence with all of its future challenges in terms of supply, logistics, crime and much more! This closes the circle, because through globalization not only is the world together but also its problems are coming together as well.

In order to structure the value-added chains as flexibly as possible and to be able to respond to changes in trends, the so-called “finishing“, such as the coloring of substances must be estab- lished at the end of the value creation chain, and as close as possible to the “point of sale“: Italian knitting manufacturers produce non-dyed sweaters in the Far East which are knitted and assembled and deliver these as color-neutral “blanks“. Dyeing takes place as the final step on-site in the color of the season so as not to be behind a trend.

But this will not be enough! And the large luxury labels some time ago have already introduced a so-called cruise collection for the spring and

autumn. They now offer four collections every year – and even that will not save them from sinking if the power of the brand is no longer effective – and this is foreseeable!

3-D printing will make the product of today look like the product of yesterday Because: By using new technologies such as 3-D printing – right in the middle of fashion happening without loss of time due to long transit times from the Far East – the pullover sweater of yesterday will look old tomorrow.

Changing trends and hype in the huge mega-cities of the future will undergo an extreme acceleration once again. In the future, brand labels, subcon- tracting companies, trend scouts, logistics and all those involved in the value will face completely new, unexpected challenges! Only the most flexible and innovative will survive.

Fashion is not the main problem in this world, however. The mega- cities, far beyond the mundane nature of the latest fashions, are faced with a large number of serious problems: Through the ever denser population

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growth of these cities which are home to many millions of inhabitants, completely different security concepts are necessary.

Floating cities as well must be secured in remarkably different ways in comparison to traditional cities and will have similar problems, as is the case today for cruise ships: These ships currently house approx- imately 5,000 passengers plus 2,500 members of the crew. An enlargement of these floating hotel complexes to 10,000 or even to 20-30,000 passen-gers is structurally possible at any time, but no insurance company in the world would insure the vessel and its high population of passengers; therefore, the development toward larger mega- liners has been slowed. Because: In the event of a terrorist attack on such a mega ship, the claims of survivors to any insurance company would mean immediate insolvency.

New security technologies on land, on water and in the air New security systems and technologies are on a spectacular rise on water, in the air, and on land: Iris scanners and biometric scanners like those in James Bond films will come into use as well as implants, which allow certain residents access and others not. Algorithms have long been under develop-ment by which one can predict crime so that police and security forces can prevent crime even before the actual crime is committed. An already

functioning examle of such an algorithm is the currently strongest weapon in the fight against terrorism, the analysis software “Palantir“.

Computer-networked cameras analyze the activities of millions of people in large cities and these activities are compared with normal and ab-normal patterns of behavior in order to stop crime before it happens. In the future, this will not only be the playing fields of developers and crime specialists but also of attorneys and probably even ethicists: Can a criminal be arrested already before crime act has been committed? Is the thought alone punishable?

Security technology will be fertile ground in the future “Crime prediction“ will be a focus topic due to increasing population densities in new urban environments such as floating cities. War, robberies, terrorist attacks and crimes of all

kinds create more and more victims even in the smallest possible spaces and must be avoided at all costs. The price for data protection and increasing transparency is privacy itself, but security and social peace are not free. Providers of innovative security technology will find fertile ground!

Here RFID implants will play an important role with which you will in future replace keys, access control systems and more. Implanted under the skin, these implants will be able to “track“ crowds, movement flows, traffic jams, crime and much more – as it already does now with tracking packages.

Crimes will also shift more and more from real life into the virtual world. Cyber crime through incredible volumes of data and through the “Internet of Every- thing“ will increase at an unimaginable impetus. In addition, virtual currencies that support cyber crime will also revolutionize the financial system as we now know it. Real currencies with all its advantages and disadvantages will move more and more into the background.

Even today, Sweden is considering, for example, the elimination of cash, which supports corruption and illegal work. The path from virtual money to completely new virtual currencies is no longer so distant in the future as we have already observed the existence of the virtual currency “BitCoin“ for a number of years now.

Hollywood is becoming a realityIn addition to the biometric methods that serve as security, individuals and their bodies will also enter the medical field with different approaches: 3-D- printers will one day be able to “print“ organs and revolutionize transplantation medicine; through the intelligent use of smartphones, probes in mini-implants etc., medical checks, tests, diagnostics and simple therapies will be possible even from remote locations. “Smart diagnostics“ is the magic word for the near future!

Bionic limbs: Leg prostheses, which are better than the original As a result of continuing technical advances related to the human body – from hearing implants to intelligent prostheses capable of registering thought – in the future maintenance contracts will, in many cases, replace traditional treatment by a doctor. The model of the traditional hospital and also traditional health insurance will soon be put to the test by the next generation

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of “wearables“, mini implants, printed organs which make organ donations superfluous, and much more.

Bionic limbs, also prostheses, which can no longer be differentiated from a real leg or which are even better than the original may possibly require highly specialized technicians and programmers, but neither doctor nor hospital.

Also in the operating room, many machines and computers are taking over many tasks and already today high-tech makes many operations more accurate, faster, and less risky, ruling out many complication. “Smart Surgery“ will revolutionize the field of medicine.

Even here there are some developments which have proven disruptive. And this is just the beginning!

We now examine some of these visions of the future after they are combined with each other, offering a fantastic, futuristic outlook:

On the floating cities of the future these types of high-tech maintenance hospitals with a lot of technology and little personnel will be constructed. They can – hovering in a mega zeppelin – be opera-ted above a war zone and with only a few specialists can provide many thousands of war victims with support and can provide the same services a few days later for victims of an earthquake disaster at a completely different location.

One thing is already clear from today’s point of view: Flexibility is a key element in the future. Business concepts that are rigid and not dynamic cannot adjust to constantly changing circum-stances and will disappear, just like fashion labels with only two collections per year: in the age of turbo fashion they will no longer have a license to undertake business as usual. The future urban environments will soon require

other energy concepts: The first priority should take into account the growing demand for energy from a rapidly growing world population while at the same time sources of crude oil are drying up. The burning of fossil-based raw materials such as coal, etc. appear more and more senseless against the background of increasing environmental and air pollution because already today, for example, the sun in Beijing is barely visible on some days because of smog.

Great hope had been placed in a project named “DeserTec“ a few years ago: Here, in sun-rich

desert African countries, huge parabolic mirrors were placed to collect the infinitely available solar energy. In addition to different positions at the conclusion of the whole project and many rifts in the discussions, unfortunately neither the storage media nor the line cost were viable for the future. Scientists agree that both of these problems must be resolved in the not too distant

Mega-Topic Number 4: Using new ideas to combat energy and resource shortages

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future and then similar mega projects will supply power to the earth.

This is a chance to offer a modern form of develop-ment aid, to provide on-site jobs to poor but sun-rich African states and establish a motivation to stay in the country. This is not entirely selfless and disinterested because the flow of refugees from the poor to the rich countries will cost much more!

Sun, Wind and Space Technology In addition to solar, wind energy also remains an exciting future topic: An extremely flexible and environmentally friendly energy generator is the “Buoyant Airborne Turbine“, Wind BAT, for short. A helium-enabled floating, super-light wind turbine can be brought by truck to almost every place in the world. The wind turbine is raised in the sky and generates extremely high amounts of energy due to the constant wind, without civic associations and neighbors protesting against the wind farms in their backyards.

In addition: At 300-400 m height, the wind blows stronger and reaches 6,000 instead of the usual 4,000 full load hours which provides for better yield. Because: Double wind strength means eight times the amount of energy. Makani, which was acquired by Google in 2013, is already planning a flying mega-generator which is as large as a jumbo jet: it weighs 10 tons and generates 5 megawatts of power.

One day, “Bloom Energy“ will be similarly uncomplicated and will be used to supply single households with energy: In this case, electrical power comes from a small box, in which oxygen and gas are converted to energy through so-called “Fuel Cells“. This former NASA technology has actually been around since the sixties but failed in distribution to date on a large scale because of the high cost. But that will change and the business models of the large electricity suppliers will be turned upside down!

The compact fusion reactor could also solve the energy problems of the future: In this new form of power plant, a block the size of a container ship would supply around 220,000 households. Scientists are trying to elicit the secret and technically imitate the largest, infinite source of energy in the world: The Sun! One of the manufacturers, Lockheed Martin, has stated that this groundbreaking technology is already attempting to capture the energy from the sun in a small magnetic bottle: It's closer than you think!

Insects, starfish and synthetic meat on the plates of future gourmet chefs However the people of the future will not be nourished through energy alone. It is hard to imagine, but in 2050, depending on projections and source – almost 10 billion people will populate the globe! To supply food to that many people, approx. 60 % more food will have to be produced than today, but above all, the supply of meat will not suffice to feed the world in the long term. Cheaper and affordable protein produced for the masses comes in the form of insects that will in the future be raised on huge farms in order to satiate the world’s hunger for protein with physiologically quality food.

Starfish, insects, algae and mollusks are the basis of food in the future and synthetic meat will be cul-tured in huge sterile tanks: Researchers at the University of Maastricht have already proven that a nutrient solution muscle tissue can be cultivated from stem cells. The taste takes some getting used to and the technology needed to produce it in large quantities at acceptable prices is still under develop-ment. Still!

Food from a 3-D-PrinterIn the future, human food mixtures can be inserted into a 3-D-printer, the basis of which could be insect

protein, and comes out in an appealing design such as a cake, a cheeseburger or a 3-D-pizza, just as delicious as the original, in perfect composition and therefore possibly even healthier, with less resource consumption and with less waste.

The latter is a further important topic of the future: Through state- of-the-art recycling concepts we will be better at recycling raw materials and creating energy and resource-saving processes. Today, about 65 % of household waste is processed, the rest is destroyed. An incredible waste of raw materials, energy, and resources! The stated goal of the future is 100 %, and this offers so much potential.

When agricultural areas are no longer infinitely expanding, the number of greenhouses will grow in the future. In skyscrapers with many greenhouse levels plants, vegetables and fruits ripen in so-called “hydroponic“ systems, ie without soil, in the future. A pleasant side effect:

Water consumption is reduced by up to 95 % – because water is also increasingly becoming a scarce commodity!

Chloé Rutzerveld (www.chloerutzerveld.com)Credit: Bart van Overbeeke

Credit: Altaeros Energies

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Mega-Topic Number 5:

Augmented Reality & Entertainment Technology

For years in many Hollywood blockbuster movies, we have admired stars such as Tom Cruise in “Minor-

ity Report“ as they direct things around them simply by motioning in the air. The topic of “3-D Gesture“ will also soon be taken from the world of film and into real life, changing the way we interact with computers and display screens. In small ways, this technology has already been in use for a long time in the real world: The game console Wii which has been in existence for many years can be controlled through movements.

The perfect heart surgery using Hollywood technology In the future, people will no longer be sitting stiffly in front of compu-ter screens and typing on keyboards which has not been very accommo-

dating towards working anywhere, anytime; motion scanners equipped with hologram technology will enable the possibility to work freely in the middle of the room. Another Hollywood invention called “Magic leap“ will function similarly to revolutionize the world of work because here – similar to an anima- tion in the film – in the middle of the room, little figurines, for example, the princess, her white unicorn, or the little elephant can be used and they go soaring in miniature format, controlled by the viewer.

All of these Hollywood gimmicks are being increas- ingly applied in real life: Heart surgeons can test and think through complicated operations using this 3-D animation, technicians and repair personnel could virtually turn and twist a defective part to find the error.

At the same time, a connection to the Internet can call up a blueprint of the machine and show the cons truction instruction for the spare part on the screen and on the adjacent 3-D-printer. Two minutes later, the defective part is finished and can be installed.

By remote control from a high-tech center, vividly animated and fully digital networked instructions for unskilled repairs of various machines can be completed on-site. The multi- vendor service concept is taken to the extreme, and revolutionized the classical repair service. Spare parts vendors, service providers and their traditional service technician will be facing stiff competition –and very soon!

The successful business models of the future are dynamic The future will offer infinite opportunities, but unfortunately also many risks. A company that underestimates a trend, responding too late, will find itself catapulted out of the market faster and faster. Cost reduction, product quality, and many of the traditional factors of success will be pushed to the background by an even more important criterion: Flexibility!

What exactly does this mean? If wage costs rise in China, then the production can be relocated immediately to Cambodia! If social unrest occurs in Bangkok, then production orders will be issued to Indian seamstresses in no time flat. If a devastating tsunami and an earthquake in Japan brings Toyota's engine production in Japan to weeks-long standstill, then the car factory of the future will start up operations in a few hours on the other side of the world. Flexible business concepts, movable manufacturing equipment, mobile power and energy concepts become existentially relevant. The factories of the future will be modular in design and are thus mobile in every respect!

The most modern module technology will ensure the start of production in minimal time; years- long construction of a plant will be a thing of the past. Companies with traditional concepts will not be able to keep up in a constantly accelerating economic system:

Credit:Magic Leap

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During the many years of construction needed for a new factory to be opened, the production wages will have multiplied in the meantime and start of production is no longer economically viable and billions have been wasted.

The same applies if social unrest breaks out in a seemingly safe and quiet country during the multi-year construction period which escalates into war-like conditions and the supposedly good location decision is turned on its head. Sudden changes in laws, new taxes or penalties, even extreme currency fluctuations as exemplified in the collapse of the ruble in 2015 could turn some good location decisions upside down in the shortest possible time.

Floating Factories, Floating Cities, and Flying Pipelines

Location decisions, manufacturing and storage networks and much more are subject to ever shorter decision cycles and will have to be revised. Only those who have planned, internalized, and exercised extreme flexibility in their business concept will survive! The production on floating factories that move from any producer countries towards changing customer countries will be more flexible and versatile.

Movable floating city-platforms with software super brains from San Francisco will probably move elsewhere as soon as a new Silicon Valley emerges somewhere else.

Work on-site and move on as soon as the environ-ment changes: It will also create the “floating cities“ in which workers may be housed in the future who are working on the last oil well in the furthest corner of Siberia until the oil well dries up, before moving on to the next temporary job location. The idea of the oil platform which makes living and working for a definite period even in an inhospitable ambiance possible and which offers a complete urban infrastructure that can be moved as needed, will characterize life and the work of the future. Flexible modules are trump cards!

Companies that have for years built infrastructure here will soon no longer be competitive when the environment begins to change dramatically at an accelerated pace. Investments must not only amor-tize faster and faster, but they must also meet the demands of extreme flexibility, because if Putin can,

from one moment to the next, bring the very expen-sive pipeline system “Southstream“ and billions in investments to a complete standstill with the flick of a finger, as was the case in December 2014, causing the shares of participating companies such as Salzgitter to suddenly plummet, it would be good if the pipeline could flexibly just disappear and materialize somewhere else.

Operations centers with rapid deployment forces and task forces instead of stuffy boardrooms

However, flexibility has a crucial prerequisite: Transparency! Information in real time is indispensable, nothing is older than yesterday’s info!

Successful companies have to structure their entire value chain to the smallest detail with flexibility and be able to manage it. If the spare parts on a ship that sinks in the middle of one of the world's oceans, if war breaks out making production in a country impossible, if unforeseen things happen and the supply chain must be trans-formed on the turn of a dime, then the people who can act pro-actively in an emergency must step up rather than react when it is often already too late.

Corporate headquarters are being outfitted with control towers with high-tech installations, that would even make NASA pale in comparison

Software, such as that produced by Munich IT firm ClearOps, which captures and shapes value at each step along the value chain, which actualizes updates to situations every second, which plays through scenarios in real-time, and optimizes cost-benefit relationships – will support the champions of the future. Company headquarters are becoming control towers with high-tech installations, such that even NASA would pale in comparison.

Sophisticated weekly board meetings with their soon-to-be obsolete, medieval Excel tables will transform into interdisciplinary working “War- Rooms“ which provide for the exchange and replacement of real-time figures within minutes. A different type of manager than today will be successful because extreme mental

Credit: Wikipedia

Credit: Blueseed

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flexibility, speed, problem-solving skills etc. will be more important than traditional success factors such as an MBA from the right business school.

The single occupant offices of board members will merge into operation centers; permanent com-munication and data synchronization is the goal. Hierarchies will dissolve and will be transformed into interdisciplinary, turbo-speed task forces which will be oriented again and again to current problems. Long-term strategies and medium-term tactics will be led as part of a daily obstacle race, ad absurdum.

The world as a Teflon pan in which hot oil swirls around The world is becoming more and more agile and ready to move, like hot oil in a Teflon pan in which large and small beads of oil are swirling around. Modular factories, extremely dynamic companies, flexible production networks will be constantly moving in light of changing wage costs, unexpected wars, weather disasters, etc. like a traveling circus around the world.

Highest flexibility and capacity for flexibility will distinguish the innovations of the future and differentiate successful, often disruptive tech- nologies from obsolete products and concepts! Today, large and sluggish companies are buying up ideas from small, clever start-ups!

Only the most clever, fastest, most flexible will survive! More than 150 years ago, Charles Darwin, the great British natural scientist and evolutions theorist, precisely recognized that the harsh law of nature is what evolution has intended for us. Darwin's “Survival of the Fittest“ is often wrongly interpreted but means that whoever survived the struggle of evolution and who is best suited to adapt to adverse conditions therefore brings the best “fit“ to the current situation. Darwin was right and it goes far beyond anything he could have imagined back then: His law applies to people as well as to companies, yesterday as well as today and tomorrow!

In the beginning, there were thumbs: The very first disruptive innovation For thousands of years, people had no thumbs, but rather a “fat digit“ on their hand, similar to apes. First the mutation, which resulted in a change of the angle of the thumb joint, turned the digit on the hand into a thumb and enabled the further develop-ment of our prehistoric primal ancestors into today's modern human. People without this mutation died. Pure Darwinism! The thumb was therefore the first “disruptive innovation“.

Conclusion:

Companies should be extremely vigilant, because not every disruptive development will be as advantageous as the thumbs of modern humans!

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Barkawi Management ConsultantsBarkawi Management Consultants was founded in 1994 and today employs over 100 staff with locations in Munich (headquarters), Shanghai, Moscow, Atlanta, and Vienna. Custo-mers of Barkawi Management Consultants are globally active companies with capital-inten-sive and logistically complex business models such as 3M, BMW, Daimler, Fresenius, Nokia, Vodafone, and many more.

Barkawi Management Consultants GmbH & Co. KG Baierbrunner Str. 3581379 Munich

Telephone: +49 89 749826-0Fax: +49 89 749826-739 info@barkawi.comwww.barkawi.com

Barkawi Management Consultants is part of the Barkawi Group. Carena and Karim Barkawi are Managing Directors of the holding and parent company.

Awards

Business Management

Carena BarkawiFounder and Managing Director

Karim BarkawiFounder and Managing Director

Dr. Andreas BaaderManaging Partner

Wolfgang SchürholzManaging Partner

Alexander NedelchevManaging Partner

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The world is increasingly becoming a moving mass, like hot oil in a Teflon pan, in which large and small beads of oil continuously move back and forth. Modular factories, extremely dynamic companies, flexible production networks will continue to move around the world like a traveling circus due to constantly changing labor costs, unexpected wars, weather disasters, etc. Highest flexibility and capacity for flexibility will differentiate between the innovations of the future and the successful, often disruptive technologies from obsolete products and concepts!

Only the smartest, the fastest and, most importantly, the most flexible will survive ...

Barkawi Management Consultantswww.barkawi.com

The Thumb, Flying Villages

and Floating Cities