Every Chief Information Officer (CIO) must think about enterprise technology trends and tech investment planning for innovation. To provide guidance for CIO strategy and the CIO role, quantitative futurist Amy Webb, Founder and CEO, of the Future Today Institute, explains her report, 2021 Tech Trends and what it means for CIOs.

In this conversation you will learn about these topics:

Amy Webb pioneered a data-driven, technology-led foresight methodology that is now used with hundreds of organizations. She is a professor of strategic foresight at the NYU Stern School of Business. She is a Visiting Fellow at Oxford University’s Säid School of Business, a Nonresident Senior Fellow in the Atlantic Council’s GeoTech Center, a Fellow in the United States-Japan Leadership Program, and a Foresight Fellow in the U.S. Government Accountability Office Center for Strategic Foresight. She was elected a life member to the Council on Foreign Relations and is a member of the Bretton Woods Committee.

She is the author of several popular books, including The Big Nine: How the Tech Titans and Their Thinking Machines Could Warp Humanity, which was longlisted for the Financial Times & McKinsey Business Book of the Year award, shortlisted for the Thinkers50 Digital Thinking Award, and won the 2020 Gold Axiom Medal for the best book about business and technology.

Transcript

Michael Krigsman: Amy Webb of the Future Today Institute explains her tech trends report and the implications for chief information officers.

Amy Webb: We've built a system that is somewhat heuristic and somewhat relies on NLP and AI that allows us to go very, very broad. We do this in a very methodical way. We start with 11 macro forces where we see most change emanating because no one entity has total control. But we are doing all kinds of scraping and pattern recognition and just trying to figure out what is blipping up.

What I see happening too often, especially with CISOs and CIOs, is that you get tunnel focus or tunnel vision, which I totally understand. It's been a rough 18 months. There's been a lot of uncertainty.

You are the unsung heroes that never get the thanks that you deserve. Let's face it, none of the working from home would have happened without you. But I get it. You're under this pressure to make decisions fast, to prevent the next solar winds, to do all of these things.

How can the 2021 Tech Trends report help Chief Information Officers (CIOs)?

What winds up happening is all the stuff that's happening on the periphery, which may not have an impact on you in the next 12 months but could totally shape your future in the next 3 to 5 years you put off. And so, what I think is that if in (at least in one moment in time) we have everything in one spot so that you can look across all of the different trends, it will help change your perspective.

Being able to have a re-perception of the signals that exist is really important for you going forward. We wound up with over a thousand weak and strong signals that we had to do something with.

Michael Krigsman: Amy, when you talk about weak and strong signals, what do you mean?

Amy Webb: These are indications that change is afoot. A weak signal would be an example of a new technology. Maybe it's a one-off. You don't see any other partners like it in the field.

I would say, a couple of years ago, sleep tech would have been a weak signal. There were a couple of players messing around with ways to optimize your sleep.

That is a trend now. It met the right criteria. We saw enough movement in the marketplace. We can calculate the trajectory of it. Typically, it begins as blips on the fringe, one-offs, seaming outliers.

Strong signals are more mature. There are more examples. There's more data or it's a big, obvious, "Hey, look at this thing."

They alone don't tell us what the future looks like, but if they meet certain criteria and we determine that they are trends that are likely to take some shape over time, then we start tracking them much more seriously.

Michael Krigsman: Essentially, you're looking at the prevalence of technology: what's being used, what are the products that are out there, the uptake, things like that.

Amy Webb: Well, it's not just products. There were so many signals this year, we wound up with more than 500 trends, which we did not do just for fun. It was hell trying to put this thing together. We actually split the report into 12 separate volumes and then published an additional volume that shows everybody how we did the work.

The AI volume of the report doesn't really talk about AI products as much as it does the underlying factors. We're trying to get to primary source change. This would be research that we see changing how things work or significant shifts in the workforce, things like that.

What critical technologies should Chief Information Officers pay attention to?

Michael Krigsman: What did you come across as being most important that we need to be aware of? What are some of the ones that we should be aware of that maybe we're not aware of?

Amy Webb: There are 12 volumes. They each cover a different set of themes and topics.

I think, in the AI volume, one thing that really took me by surprise – my team and I all research different areas, so AI is an area that I cover. I came across some really interesting research showing the number of people enrolling in one of Stanford's most popular NLP classes. It's like 10x. The numbers shot way up.

But then I looked at the number of papers that were accepted over the past three years at NeurIPS, which used to be called NIPS (for people who are in the know), which is the big, huge annual conference on AI that attracts top talent. If you're a researcher, you want to get your paper accepted here.

Here's what's interesting. The number of people coming out of arguably one of the best programs in the United States, the number of enrollees, people coming out is super high. But the number of papers accepted at this conference is indexing high in China. Meaning, we've got way more people coming out of our system but, as a percentage overall, way fewer papers.

To me, that's a pretty interesting, strong signal because what happens in papers becomes what happens in products and elsewhere. To me, that was just a really, really interesting change in dynamics.

I would say, in the new realities volume, AR and VR get both conflated, which is wrong because they're completely different technologies, and they hog the spotlight. There's actually a whole bunch of other types of realities that are far more impactful in some ways and more interesting.

There's something called diminished reality. Michael, you probably are already familiar with it. It's noise-canceling headphones, right?

That same technology is coming to physical spaces. Instead of noise-canceling headphones. Imagine a noise-canceling window with that technology built in. That totally changes our urban landscapes, our soundscapes, things like that.

Then there's assistive technology, so it's kind of a bridge. I think, especially for those in the enterprise, everybody is drastically underestimating how much of an impact assistive glasses are going to have on everyday life.

These are glasses, just like what I'm wearing, that have some AR functionality, but they're more assistive in nature, meaning they've got both audio and visual. They provide you with information to help you move throughout your day. They do lots of other things like taking your health information. Things like that, I think, are interesting.

There's also prescription-strength gaming. Last summer, the FDA approved a video game that you have to have a prescription in order to play. It's actually not the only one. That signals a shift.

We have a whole volume on health that's really interesting. I think we've seen a lot, over the past 12 months, that indicates sharply different paths forward now in health and health tech.

Michael Krigsman: Amy, there are all of these technologies and signals that you and your team have covered really extensively. As someone in the enterprise, how should we relate to this? It's so confusing, right? We have to place our bets and make our investments. There are millions of dollars at stake, potentially, so what do we do?

Amy Webb: Yes, I'm aware of that because we are oftentimes the people helping some of these organizations make those decisions. I understand that many of you are really focused on what I would consider to be the extreme near term, so the next year or two years, but you must make your decisions in their very near term horizon with an eye on the mid horizon and farther horizon because, if you don't, you have more than just extensibility to worry about.

I think that's one of the key challenges in these enormous corporations. You want to place your bet on the right horse.

I can give you a quick, great example. There's a midsize – I would say – hospital system that years ago went with an EHR (electronic health record) system. I know that their tech team and their CIO, there was a lot of consternation around which one to pick because, at that point, I think there were probably three or four different competing systems. As all of you know, over time, there's consolidation and basically, you wind up with two or three players.

I think the most important thing is that companies make these decisions based on cost, a lot of times, which I get because technology, if you're not in the field, feels like this place where you can scrimp and save a little bit. The problem, of course, is if you back the wrong horse and you go with the cheapest company, maybe they're not the ones that are going to put the resources into continuing to maintain whatever that product is. In this case, the hospital.

A couple of years later, that company closed its doors. The system that they built wasn't easily portable into another system. It was super kludgy and they had two really robust EHRs to choose from but somebody was going to have to manually – there was no easy way to extract all that data and port it into another one.

How do you make these decisions then in a smarter way? Part of this is, obviously, really tracking what's happening. I don't think most organizations are dedicating enough resources to really doing that.

You have to look outside because if we could get a time machine and go back three years and say, "Hey, there's going to be a global virus, a pandemic three years from now that is going to be horrible, but also is going to lead to brand new ransomware attacks that just nobody has ever thought of before," everybody would have been like, "Global pandemic? New virus? Come on. Give me a break."

You have to be prepared for these kinds of things. Ask questions like, "Whatever this thing is that I've just heard about or whatever this seemingly unrelated trend, how could this make us vulnerable? Maybe not today, but in the near future."

"How might this make our constituents vulnerable, our partners vulnerable? How does this thing that I've just heard about challenge our current thinking about our strategy or our operations?" Then hopefully, "Where does this create new opportunities for us? What tangible next step would we have to take in order to understand this thing and all of its dimensions better?"

The problem is, most companies are not asking those questions and they're also not looking at the kinds of new material that would elicit those questions.

How should CIOs navigate technology planning choices?

Michael Krigsman: We are confronted with so many different options, so many different confusing signals (to use your term). At the same time, to address the point you just raised, we have a short-term time horizon because that's how we are measured. And so, how do we navigate this and how do we ask these kinds of questions, "Okay, where are we vulnerable?" But you have 500 different signals, technologies that you've studied. We can't look at all of those and ask those questions.

Amy Webb: The answer is, though, you should be. You sort of know the usual suspects. You have to go one or two clicks outside of those usual suspects or, better yet, I can't tell you how many organizations – I will tell you one, but I can't tell you who it is because it would be bad.

Let's just say there's an enormous agency out there whose managers I was in a conversation with who said that they knew lots about AI. I said, "Okay. That's great. What do you know? What are you looking at? What are you guys doing?"

I heard sort of top-level buzzy-sounding language repeated back. It was pretty clear to me that they didn't really know, and that's fine because these are senior executives and they don't need to be in the weeds in this stuff.

I said, "Okay, okay. Who are the people in the organization whose charge it is to really be paying attention to this? And what latitude do they have to go out and look for new information?" They didn't know.

"Okay. Well, who are your PhDs? Who are your Ph.Ds. that have something having to do with anything within the AI umbrella?" They didn't know that either.

I said, "Listen. If I ask those exact same questions of Amazon, Amazon would have the answers, but also Amazon would be able to tell me how many economists, like economics PhDs they have, how many design thinking people they have, and how many synthetic biologists they have."

Amazon is a marketplace, right? Amazon Web Services is whatever. It's a cloud. What do they need biologists for? This is my point, right?

My point is that the world is complex. We are all facing deep uncertainty. I don't know of many organizations that are intentionally looking far enough outside of what they do to really make a dent, to position themselves so that they're making a dent in their futures. They're just not. They're being dragged forward by somebody else.

Michael Krigsman: We have an interesting question that's come up on Twitter. This is from Matt Carrasco. He says, "Regarding healthcare," since you were just talking about that, "how would you go about analyzing the near term and long-term implications for the massive shift, $600 billion in spending across your probably, plausible, and possibly fringe scenarios?"

Amy Webb: This is what we would call an inflection. We're always looking for patterns. I'm always looking for patterns where there are contradictions, inflections, changes in practices, things like that.

Obviously, this is a huge inflection and, typically, inflections tend to have lots of next-order impacts. Some of that spending has gone to improving digital workstreams and workflows within the healthcare space.

I don't know how to impress this enough upon people so that it makes sense. The emergence of a Messenger RNA vaccine is not brand new. This is something that has been many, many years in the making because the companies that came to market with this first were looking at that very same technology for cancer.

Part of the problem (this entire time) has been regulatory approval and the amount of time that it takes because it's different. This is not an attenuated virus that's being shot into us. This is a new kind of technology that enables the body to self-heal. The fact that that got regulatory approval, even if it was in this emergency way, now clears the path for lots of other use cases.

Messenger RNA is not a panacea for everything, but it does totally shift (finally) how we can be thinking about pharmaceuticals. Why does that matter if you're not in pharma? Because, as a percentage of GDP in the United States, the pharmaceutical industry is a big player.

Again, that explains the situation that we're in right now. My job became much, much harder in December of 2019 when the virus was first emerging (that we knew of).

Anyhow, I would say, in the very near term, stuff you already know. More telehealth, more telemedicine, more options, more flexibility, probably bigger headaches for organizations that were not set up to do that and, certainly, encryption and ransomware and other security challenges on the horizon.

In the long-term, we're looking at a completely different approach, which I think is a good thing to health and wellness. We're probably looking at, the long-term effects of this increased longevity, having the body be able to self-heal in more ways, lots more preventative medicine, probably many more doctor-free exams, meaning you will always know what your levels are without ever having to go to a diagnostic center to get blood drawn and things like that.

Culture change and technology innovation

Michael Krigsman: We have another interesting question from Twitter. This is from Arsalan Khan, who is a long-time listener. Thanks, Arsalan. You always ask the best questions. He makes the point that large companies may have the budget to think about future risks and challenges and do this kind of analysis that you were just describing, Amy, but smaller companies don't. Therefore, what should smaller businesses do?

Amy Webb: Our work is open-source for a reason. I don't agree with that assumption and I hear it a lot. "We're just not a big enough company. We just don't have the resources. We just don't have the budget."

This is really much more about perception than it is about a P&L.

Here's one thing that every single person who is listening can do for the next week that will orient you more toward an expansive view. This is actually the first homework that I assign to my MBA class at Stern (every time I teach).

Here's what it is. Starting tonight, and for the next week, do something different every day. It can be small. It can be something as silly as sleeping on the other side of the bed, which I know is actually kind of a big deal for some people. Or eating breakfast for dinner. Do something different every day and your objective is to notice if you are seeing things differently as a result.

What we're doing is forcing your brain into a new neural pathway. That costs no money. All it does is ask you to break free of the patterns that you're used to following so that you can start to establish new ways to see the world differently so that you can take in signal data differently. That is a minimum viable pathway to thinking more like a futurist.

Now, obviously, it scales up from there. But there are lots of things that every business could be doing. Some of this is just asking better questions in a more strategic way.

Don't hate me for saying this, everybody who is listening, but I find more resistance out of CIOs and CISOs than I do in other parts of organizations. I totally get it. There's a lot of risk riding on your shoulders.

Sometimes, that can almost be an albatross. If you can allow yourself to think a little bit more broadly, even if you are the world's great process thinker, I can assure you that you'll be a more valuable asset to your organization because you'll have both sets of skills. You'll be a good, strong process thinker. You will keep that organization running in the way that it needs to be, but you'll also have a more creative, expansive mindset in doing that.

Michael Krigsman: Is this a tension between thinking about innovation versus efficiency?

Amy Webb: Yeah, I know a lot of this stuff just sounds squishy. I totally get it. I'll go back to Pierre Wack for just a moment. This was the guy in the '70s who was at Shell.

Shell in the 1970s, right? Full of men in suits doing big, strategic thinking. Here comes Pierre who is super into Eastern philosophy and studying world religions. Nobody can grok him inside this organization. Yet, he was able to prove that adjusting some of how you think can lead to extraordinary discoveries.

I guess what I would say is I know there is a tension between immediate term and longer-term, innovation and execution. Those tensions exist. I get that.

I think the people who are our greatest future thinkers and some of the organizations that do the best job continuing to make their markets and to move forward actually operate in the middle of those two. They are dynamic. They're flexible. They are squishy in how they think.

My favorite example, I'm going to ask you this question, Michael, and see if you know the answer. The way that I describe companies is as pathfinders and bystanders.

A pathfinder company is positioned really well. It's got the right culture. It could be tiny. It could be huge.

No matter what disruption comes they are seemingly always prepared. Not only are they always prepared. They're also so far ahead of everybody else that they're making the market. What they're doing, the decisions they make, they trickle down to everybody else.

My favorite pathfinder company is Nintendo. Michael, any idea when Nintendo was founded?

Michael Krigsman: Gee, they've been around for a very long time, haven't they? I don't know the year, but it's been – God, they've been through so many different generations.

Amy Webb: Yeah, so many different consoles. Right, so that's my favorite question to ask executives, "When was Nintendo founded?"

Almost universally I get the same kind of answer, like, "Oh, yeah. They've been around for a while, like since the '80s, right? You know Mario, Donkey Kong."

I'm like, "Yeah, absolutely right, the '80s – the 1880s." Nintendo was founded before automobiles were on the roads. Everybody is always shocked when they hear that.

Nintendo originally was a company that made something called Hanafuda playing cards. I used to live in Japan. I lived there for many years. These are cards that are made out of a specialized paper. You required special inks. There was this entire value chain built around this company and this game, and they were very expensive, right?

At some point, you've got the radio. You've got electricity in homes. You've got a television set. What was so smart about what this company continued to do was that they were always thinking not about the next two years of our market, what the segment looks like, and who our competitors are. Yes, they were paying attention to that while at the same time thinking about, hey, this television thing, this is our competitor.

As it's emerging and nobody else is paying attention to it because it's huge and clunky and expensive and there wasn't a lot of programming – it was mostly news – Nintendo was looking at this thing thinking, "Ten years from now, this is going to cause us to go out of business." They just kept doing that over and over again.

What do we do? They help invent the console that you can plug into the television set to play the game.

Everybody is getting excited about games. What are they doing? They're thinking again, ahead, and they're noticing that people are no longer staying in their homes. There's this thing called the shopping mall, and it seems like teenagers might be spending more time in the shopping mall.

What do they do? They take this game that everybody is used to sitting down and playing and they create a stand-up machine that you have to pay, you have to put a quarter in, in order to play, and invent the video arcade.

Anyhow, so here we are in the year 2021. They're not the biggest company. They're not the biggest gaming company. They're not like Eve-online. They're not reinventing the mechanics, but they are still around. They've got very healthy margins.

What did they just launch? They just launched an augmented reality theme park. We don't have a lot of augmented reality yet, so it's a good example because this is a company that, like all of your companies, has to make decisions in the very near term, but they do that while thinking about where that future market is going to go.

Michael Krigsman: That's a fascinating example. I can tell you one thing. Nintendo is now high on my list to pursue to be on CXOTalk because I've interviewed many senior execs from many companies that were started in the 19th Century or early in the 20th Century. Of course, they're all tremendous innovators because clearly, they've adapted.

Amy Webb: Right. Nintendo, if you stop and think about it, this company shouldn't exist. They've been through two world wars, a Japanese economic collapse, the advent of the movie theater, of the television set. Over and over and over again, this company should have been killed by all of these different things, and they weren't.

By the way, they still make those playing cards. They never pivoted. They just evolved.

Michael Krigsman: What is it about Nintendo that made this possible?

Amy Webb: Again, this has to do with some of what we've been talking about and what I would call the hallmark of a pathfinder company. They're asking really challenging questions all the time for the purpose of challenging the status quo.

I walk into a lot of organizations and I'm almost always dealing with executive management. Way too many times I hear people say, "We're already doing that."

Great. I'm happy you feel confident that you are already doing [it]. You're not.

Having the confidence and the ability to say, "I'd love to know more. Help me understand more dimensions," things like that.

They do a lot of that type of work. They have a very broad aperture as they are looking at the future, so they're not just looking at the usual suspects in terms of their competitors. They're not looking at the usual nearly adjacent technologies and research areas. They go really broad, and they're trying to look for where there are changes.

They're very good at mapping and understanding forces of change, which is a skill that you have to hone. It doesn't just come naturally. You've got to intentionally do it. There's also a way for everybody to participate.

The other thing I see in a lot of companies is that the foresight function, so thinking about the future, oftentimes does not report into strategy. You've got your strategy folks who are really just doing three- to five-year planning, sometimes less than that.

The skillset that I have, you can learn but you have to learn it. Scenario planning isn't like writing a bunch of cool stories.

What they do is they tend to have young people or interns do some sort of cool hunting or looking for trendy things, and they've got no training. What's happening on social media or who is doing what on TikTok, they use that, and then they kind of have a loosey-goosey way of doing scenario planning. They wonder why the future doesn't show up the way that they thought it would.

You have to practice this. The analog to this, of course, is Blackberry, which, for a time, was making great technology but they were no longer hungry. They didn't think about disruption, and there were lots of people in the organization – I know because I talked to them – who were saying, "Hey, haptic devices, hey, MP3s, Napster, we should be looking at this stuff."

If you were to go back in time, I wouldn't have known that the iPhone was coming, but I could have absolutely told you that our phones would do more than send office messages, calendars, and stuff. Blackberry just wasn't methodically doing the work.

Building a culture of innovation

Michael Krigsman: We have a couple of interesting questions from Twitter. The first one is from Chris Peterson. He asks a really interesting question. He says, "Is there a pattern of culture and a pattern of bias at work with shaping those companies that are thinking forward into the future versus those that are more incremental or really focused on their P&Ls?"

Amy Webb: This is the middle ground, right? you can't take your eye off that P&L, and you've got to continually think about projections, but you have to be open to more variability.

We worked with a company two years ago whose financial projections used to be spot-on and suddenly weren't. The short end of the story is it had to do with the length of their supply chain and the fact that they had made a lot of assumptions.

They didn't have complete control over all of the variables in that supply chain. That supply chain, because managing the margins in this company was very important, they just kept going tighter and tighter through efficiencies, which left, at the end of the day, no room for anything to go wrong.

The kinds of things in their case that could go wrong were geopolitical changes that may pop up overnight, climate change issues, things having to do with transportation. They just never accounted for those things and so we saw the brittleness.

In their case, the biases had to do with process. They weren't willing to accept the fact that they would have to introduce uncertainty into their calculations. Once they figured that out and everybody was okay with it, now they're doing great.

Sometimes, the bias within the organization that exists is, "Our process has always worked. Therefore, it will always work." You know?

Michael Krigsman: We have another interesting question from Twitter. This is from Florent M. Hirwa. I hope I'm pronouncing your name [correctly]. He is in Kigali, Rwanda. That's interesting too. Florent asks, "What are some applications of smart contracts outside the creative industry?"

Amy Webb: Here's what I see happening with smart contract. I see people who are very creative. Especially people in the innovation space, they're coming up with all kinds of clever ideas that are really interesting that never land well within the organization because nobody sees an immediate use case or an immediate business case. Then what winds up happening is there is no prototyping.

There is a ton of options that range from digital ID systems. You could kind of argue that a lot of these digital passports, vaccine passports, are kind of a smart contract in spirit. Ranging from digital IDs (for the purpose of traveling, again, someday) but also if it's true that we're moving into digital realms in new ways and we've got new ways of interacting with each other, then we're going to need new ways to authenticate ourselves.

I think that the authentication and trust pieces of a smart contract are probably hold greater weight than just about anything else. There are some obvious use cases right now in remote.

We refinanced our house because the interest rates were pretty great. A lot of that was done using smart contract systems.

Then, of course, there's a whole other piece of this, which is finance: trading and settlements. The settlement side of trading is trying to get to faster and faster timeframes, you know fractions of fractions of fractions of a second. As some of this fractional ownership models, investment models (I meant), and things like NFTs and fractional NFT models, that's another interesting avenue as well.

Amy Webb on cryptocurrencies

Michael Krigsman: We have another really interesting question from Twitter. To me, this is a very practical question. That question is again from Arsalan Khan. He says, "Any thoughts on cryptocurrencies, and especially things like Dogecoin and others that we should be looking at?"

Amy Webb: We know that Fiat currencies are probably going to – we know that there is a lot of moment. There has been for a while in Singapore and in China. China is officially now launching some version.

I also lived in China when there were two bank-issued currencies, and that was kind of annoying because you had to remember what was what. It was physical paper at that point.

I actually think this is a huge opportunity for somebody, for some large organization somewhere. The concept of a wallet is still beyond the grasp of many people.

In the United States (this is not necessarily true of other countries) you would think that contactless payments—meaning you don't have to pull your credit card out of your wallet, or cash, you can just touch a device and pay—has hit some form of critical mass and it hasn't. It's still low double-digits. It's like 10% of transactions. It's a very, very low number.

Part of that has to do with people. Part of that has to do with the slow rate of changeover in all of the businesses, the places where you would use that currency, that money.

It takes them a long time to make the terminal change. If you're in a situation where you've got inventory or insurance, it's not as simple as just changing the terminal and making it work. There are a lot of handshakes on the backend that have to happen.

Here's why I mention this. It's not enough to have crypto. You have to be able to use them. You have to translate that into a system where you can receive something in return.

I think we're probably looking at a transition to something. Whether that's country, like Fiat-backed crypto per country or one global crypto—which I think is probably unlikely, but you never know—or Eastern and Western Hemisphere, you know, China-backed and U.S.-backed and European-backed, and Africa-backed, or something like that. I think we're in a transition period.

If the question was like, "Which one should you hold?" I will not answer that question.

Michael Krigsman: As far as the long-term trend goes, from what you're saying, it seems like there is an almost inevitable march but it's going to take a long time because of just the weight of corporate processes in every area that need to adapt.

Amy Webb: To some extent, it's that.

My husband is an eye doctor. He switched over from his old terminal to a new terminal because he wanted to get the newer system. He's way more into technology than I am. He was like, "Well, how hard could this be? I'm an engineer by training."

It turns out real hard because the medical record system and the insurance system didn't do the right handshake to the terminal. It was a nightmare. He tried for a month, and he finally just gave up and went back to the old system, which for a time was not doing contactless payment, even though he wanted to.

I'm just highlighting this because I think sometimes people like to blame big organizations or big institutions as the problem. I think in this case the problem is an extremely diffuse system with many different types of ways to take money.

Advice for Chief Information Officers

Michael Krigsman: As we finish up, how do you net all of this out for CIOs who are responsible for making technology purchasing decisions that address current, immediate problems but they also want success in the long-term for themselves, their organizations, and their customers?

Amy Webb: I think the biggest place for a lot of these decisions – again, my observation – is in the cloud. A lot of companies pre-COVID did not, I think, prioritize digital transformation the way they should have. They're a little late to the party. Now, a lot of decisions are being made under duress.

If you're in a situation where those decisions are being made under duress, you're going to have to figure out how to navigate that because there's a lot at stake, as you're making some of these decisions. Depending on the company, there are politics involved. There's trying to match your decision cycle with the cadence of your CapEx expenditure cycles, board approvals, and all that stuff.

I don't have an answer. There's no one answer because that's going to depend on too many variables.

Here's what I will say. Wherever you can, remind others that the decision cannot be made on a cost basis alone – it just can't. Nine times out of ten, that's what I see happening. It's cost basis or what you think you're going to get or confirmation bias.

X company is the biggest, therefore. Well, sometimes the biggest company isn't going to be the right fit for you. Some of this is a little bit of matchmaking and patience.

The other part of this, though, is you have to do two things at once. You have to make decisions in the near term while assessing the long-term. That is a challenging thing to do and you're not going to do it unless you are intentionally forcing yourself to do it. You have to ask others in the C-suite to do it along with you.

Michael Krigsman: Should we take one last question that's just popped in from Twitter? This is from Matt Carrasco. He says, "What is the long-term trend in instant communications, chat support? What needs to change to go from this is a great solution for support to convert it into something that can help sell clothes and collect?" Basically, broadening chat support. He adds, "Is no code or low code solutions an answer to this?"

Amy Webb: In the realm of synthetic media, which is deep fakes but for different purposes, so this is generative content. Chatbots are a version of that, but this is more holistic because we're talking about having an interaction with what looks very much like a person.

The ability to do that exists today. A couple of accelerants are in the works. I know we're all tired of staring at our Zoom screens, but all indications at the moment would say that this is here to stay because there's more flexibility, which means we're going to be looking at more than we were before. Not all the time but looking at people on screens.

If those people are synthetic, then that affords us some interesting new opportunities. There's a body of research showing that if you can recall the details of somebody's personal details, say their name, all of that interpersonal stuff that all of you know, that they are more receptive to criticism. They are more vulnerable, potentially. They are more open to being coached.

Imagine an AI hiring manager, an AI customer service rep, or an AI trainer who was built for everybody at the company but, once deployed, can learn about you and respond to you in real-time. That is a game-changer. That's not tomorrow, but for all of these companies that are just dumping resources into chatbots thinking that that's the end, what I would say is if you can convince everybody in the organization to see it as a beginning rather than the end, you will ride the next wave of disruption pretty well.

Michael Krigsman: All right. Amy Webb, thank you very, very much for taking your time to be with us here today.

Amy Webb: Thank you.

Michael Krigsman: Everybody, thank you for watching. What an interesting and fast show this has been. Before you go, please subscribe to our YouTube channel. Hit the subscribe button and subscribe to our newsletter. Tell your friends.

Check out CXOTalk.com. We have great shows coming up, and we will see you again next time. See you soon, everybody. Bye-bye.

Michael Krigsman: Amy Webb of the Future Today Institute explains her tech trends report and the implications for chief information officers.

Amy Webb: We've built a system that is somewhat heuristic and somewhat relies on NLP and AI that allows us to go very, very broad. We do this in a very methodical way. We start with 11 macro forces where we see most change emanating because no one entity has total control. But we are doing all kinds of scraping and pattern recognition and just trying to figure out what is blipping up.

What I see happening too often, especially with CISOs and CIOs, is that you get tunnel focus or tunnel vision, which I totally understand. It's been a rough 18 months. There's been a lot of uncertainty.

You are the unsung heroes that never get the thanks that you deserve. Let's face it, none of the working from home would have happened without you. But I get it. You're under this pressure to make decisions fast, to prevent the next solar winds, to do all of these things.

How can the 2021 Tech Trends report help Chief Information Officers (CIOs)?

What winds up happening is all the stuff that's happening on the periphery, which may not have an impact on you in the next 12 months but could totally shape your future in the next 3 to 5 years you put off. And so, what I think is that if in (at least in one moment in time) we have everything in one spot so that you can look across all of the different trends, it will help change your perspective.

Being able to have a re-perception of the signals that exist is really important for you going forward. We wound up with over a thousand weak and strong signals that we had to do something with.

Michael Krigsman: Amy, when you talk about weak and strong signals, what do you mean?

Amy Webb: These are indications that change is afoot. A weak signal would be an example of a new technology. Maybe it's a one-off. You don't see any other partners like it in the field.

I would say, a couple of years ago, sleep tech would have been a weak signal. There were a couple of players messing around with ways to optimize your sleep.

That is a trend now. It met the right criteria. We saw enough movement in the marketplace. We can calculate the trajectory of it. Typically, it begins as blips on the fringe, one-offs, seaming outliers.

Strong signals are more mature. There are more examples. There's more data or it's a big, obvious, "Hey, look at this thing."

They alone don't tell us what the future looks like, but if they meet certain criteria and we determine that they are trends that are likely to take some shape over time, then we start tracking them much more seriously.

Michael Krigsman: Essentially, you're looking at the prevalence of technology: what's being used, what are the products that are out there, the uptake, things like that.

Amy Webb: Well, it's not just products. There were so many signals this year, we wound up with more than 500 trends, which we did not do just for fun. It was hell trying to put this thing together. We actually split the report into 12 separate volumes and then published an additional volume that shows everybody how we did the work.

The AI volume of the report doesn't really talk about AI products as much as it does the underlying factors. We're trying to get to primary source change. This would be research that we see changing how things work or significant shifts in the workforce, things like that.

What critical technologies should Chief Information Officers pay attention to?

Michael Krigsman: What did you come across as being most important that we need to be aware of? What are some of the ones that we should be aware of that maybe we're not aware of?

Amy Webb: There are 12 volumes. They each cover a different set of themes and topics.

I think, in the AI volume, one thing that really took me by surprise – my team and I all research different areas, so AI is an area that I cover. I came across some really interesting research showing the number of people enrolling in one of Stanford's most popular NLP classes. It's like 10x. The numbers shot way up.

But then I looked at the number of papers that were accepted over the past three years at NeurIPS, which used to be called NIPS (for people who are in the know), which is the big, huge annual conference on AI that attracts top talent. If you're a researcher, you want to get your paper accepted here.

Here's what's interesting. The number of people coming out of arguably one of the best programs in the United States, the number of enrollees, people coming out is super high. But the number of papers accepted at this conference is indexing high in China. Meaning, we've got way more people coming out of our system but, as a percentage overall, way fewer papers.

To me, that's a pretty interesting, strong signal because what happens in papers becomes what happens in products and elsewhere. To me, that was just a really, really interesting change in dynamics.

I would say, in the new realities volume, AR and VR get both conflated, which is wrong because they're completely different technologies, and they hog the spotlight. There's actually a whole bunch of other types of realities that are far more impactful in some ways and more interesting.

There's something called diminished reality. Michael, you probably are already familiar with it. It's noise-canceling headphones, right?

That same technology is coming to physical spaces. Instead of noise-canceling headphones. Imagine a noise-canceling window with that technology built in. That totally changes our urban landscapes, our soundscapes, things like that.

Then there's assistive technology, so it's kind of a bridge. I think, especially for those in the enterprise, everybody is drastically underestimating how much of an impact assistive glasses are going to have on everyday life.

These are glasses, just like what I'm wearing, that have some AR functionality, but they're more assistive in nature, meaning they've got both audio and visual. They provide you with information to help you move throughout your day. They do lots of other things like taking your health information. Things like that, I think, are interesting.

There's also prescription-strength gaming. Last summer, the FDA approved a video game that you have to have a prescription in order to play. It's actually not the only one. That signals a shift.

We have a whole volume on health that's really interesting. I think we've seen a lot, over the past 12 months, that indicates sharply different paths forward now in health and health tech.

Michael Krigsman: Amy, there are all of these technologies and signals that you and your team have covered really extensively. As someone in the enterprise, how should we relate to this? It's so confusing, right? We have to place our bets and make our investments. There are millions of dollars at stake, potentially, so what do we do?

Amy Webb: Yes, I'm aware of that because we are oftentimes the people helping some of these organizations make those decisions. I understand that many of you are really focused on what I would consider to be the extreme near term, so the next year or two years, but you must make your decisions in their very near term horizon with an eye on the mid horizon and farther horizon because, if you don't, you have more than just extensibility to worry about.

I think that's one of the key challenges in these enormous corporations. You want to place your bet on the right horse.

I can give you a quick, great example. There's a midsize – I would say – hospital system that years ago went with an EHR (electronic health record) system. I know that their tech team and their CIO, there was a lot of consternation around which one to pick because, at that point, I think there were probably three or four different competing systems. As all of you know, over time, there's consolidation and basically, you wind up with two or three players.

I think the most important thing is that companies make these decisions based on cost, a lot of times, which I get because technology, if you're not in the field, feels like this place where you can scrimp and save a little bit. The problem, of course, is if you back the wrong horse and you go with the cheapest company, maybe they're not the ones that are going to put the resources into continuing to maintain whatever that product is. In this case, the hospital.

A couple of years later, that company closed its doors. The system that they built wasn't easily portable into another system. It was super kludgy and they had two really robust EHRs to choose from but somebody was going to have to manually – there was no easy way to extract all that data and port it into another one.

How do you make these decisions then in a smarter way? Part of this is, obviously, really tracking what's happening. I don't think most organizations are dedicating enough resources to really doing that.

You have to look outside because if we could get a time machine and go back three years and say, "Hey, there's going to be a global virus, a pandemic three years from now that is going to be horrible, but also is going to lead to brand new ransomware attacks that just nobody has ever thought of before," everybody would have been like, "Global pandemic? New virus? Come on. Give me a break."

You have to be prepared for these kinds of things. Ask questions like, "Whatever this thing is that I've just heard about or whatever this seemingly unrelated trend, how could this make us vulnerable? Maybe not today, but in the near future."

"How might this make our constituents vulnerable, our partners vulnerable? How does this thing that I've just heard about challenge our current thinking about our strategy or our operations?" Then hopefully, "Where does this create new opportunities for us? What tangible next step would we have to take in order to understand this thing and all of its dimensions better?"

The problem is, most companies are not asking those questions and they're also not looking at the kinds of new material that would elicit those questions.

How should CIOs navigate technology planning choices?

Michael Krigsman: We are confronted with so many different options, so many different confusing signals (to use your term). At the same time, to address the point you just raised, we have a short-term time horizon because that's how we are measured. And so, how do we navigate this and how do we ask these kinds of questions, "Okay, where are we vulnerable?" But you have 500 different signals, technologies that you've studied. We can't look at all of those and ask those questions.

Amy Webb: The answer is, though, you should be. You sort of know the usual suspects. You have to go one or two clicks outside of those usual suspects or, better yet, I can't tell you how many organizations – I will tell you one, but I can't tell you who it is because it would be bad.

Let's just say there's an enormous agency out there whose managers I was in a conversation with who said that they knew lots about AI. I said, "Okay. That's great. What do you know? What are you looking at? What are you guys doing?"

I heard sort of top-level buzzy-sounding language repeated back. It was pretty clear to me that they didn't really know, and that's fine because these are senior executives and they don't need to be in the weeds in this stuff.

I said, "Okay, okay. Who are the people in the organization whose charge it is to really be paying attention to this? And what latitude do they have to go out and look for new information?" They didn't know.

"Okay. Well, who are your PhDs? Who are your Ph.Ds. that have something having to do with anything within the AI umbrella?" They didn't know that either.

I said, "Listen. If I ask those exact same questions of Amazon, Amazon would have the answers, but also Amazon would be able to tell me how many economists, like economics PhDs they have, how many design thinking people they have, and how many synthetic biologists they have."

Amazon is a marketplace, right? Amazon Web Services is whatever. It's a cloud. What do they need biologists for? This is my point, right?

My point is that the world is complex. We are all facing deep uncertainty. I don't know of many organizations that are intentionally looking far enough outside of what they do to really make a dent, to position themselves so that they're making a dent in their futures. They're just not. They're being dragged forward by somebody else.

Michael Krigsman: We have an interesting question that's come up on Twitter. This is from Matt Carrasco. He says, "Regarding healthcare," since you were just talking about that, "how would you go about analyzing the near term and long-term implications for the massive shift, $600 billion in spending across your probably, plausible, and possibly fringe scenarios?"

Amy Webb: This is what we would call an inflection. We're always looking for patterns. I'm always looking for patterns where there are contradictions, inflections, changes in practices, things like that.

Obviously, this is a huge inflection and, typically, inflections tend to have lots of next-order impacts. Some of that spending has gone to improving digital workstreams and workflows within the healthcare space.

I don't know how to impress this enough upon people so that it makes sense. The emergence of a Messenger RNA vaccine is not brand new. This is something that has been many, many years in the making because the companies that came to market with this first were looking at that very same technology for cancer.

Part of the problem (this entire time) has been regulatory approval and the amount of time that it takes because it's different. This is not an attenuated virus that's being shot into us. This is a new kind of technology that enables the body to self-heal. The fact that that got regulatory approval, even if it was in this emergency way, now clears the path for lots of other use cases.

Messenger RNA is not a panacea for everything, but it does totally shift (finally) how we can be thinking about pharmaceuticals. Why does that matter if you're not in pharma? Because, as a percentage of GDP in the United States, the pharmaceutical industry is a big player.

Again, that explains the situation that we're in right now. My job became much, much harder in December of 2019 when the virus was first emerging (that we knew of).

Anyhow, I would say, in the very near term, stuff you already know. More telehealth, more telemedicine, more options, more flexibility, probably bigger headaches for organizations that were not set up to do that and, certainly, encryption and ransomware and other security challenges on the horizon.

In the long-term, we're looking at a completely different approach, which I think is a good thing to health and wellness. We're probably looking at, the long-term effects of this increased longevity, having the body be able to self-heal in more ways, lots more preventative medicine, probably many more doctor-free exams, meaning you will always know what your levels are without ever having to go to a diagnostic center to get blood drawn and things like that.

Culture change and technology innovation

Michael Krigsman: We have another interesting question from Twitter. This is from Arsalan Khan, who is a long-time listener. Thanks, Arsalan. You always ask the best questions. He makes the point that large companies may have the budget to think about future risks and challenges and do this kind of analysis that you were just describing, Amy, but smaller companies don't. Therefore, what should smaller businesses do?

Amy Webb: Our work is open-source for a reason. I don't agree with that assumption and I hear it a lot. "We're just not a big enough company. We just don't have the resources. We just don't have the budget."

This is really much more about perception than it is about a P&L.

Here's one thing that every single person who is listening can do for the next week that will orient you more toward an expansive view. This is actually the first homework that I assign to my MBA class at Stern (every time I teach).

Here's what it is. Starting tonight, and for the next week, do something different every day. It can be small. It can be something as silly as sleeping on the other side of the bed, which I know is actually kind of a big deal for some people. Or eating breakfast for dinner. Do something different every day and your objective is to notice if you are seeing things differently as a result.

What we're doing is forcing your brain into a new neural pathway. That costs no money. All it does is ask you to break free of the patterns that you're used to following so that you can start to establish new ways to see the world differently so that you can take in signal data differently. That is a minimum viable pathway to thinking more like a futurist.

Now, obviously, it scales up from there. But there are lots of things that every business could be doing. Some of this is just asking better questions in a more strategic way.

Don't hate me for saying this, everybody who is listening, but I find more resistance out of CIOs and CISOs than I do in other parts of organizations. I totally get it. There's a lot of risk riding on your shoulders.

Sometimes, that can almost be an albatross. If you can allow yourself to think a little bit more broadly, even if you are the world's great process thinker, I can assure you that you'll be a more valuable asset to your organization because you'll have both sets of skills. You'll be a good, strong process thinker. You will keep that organization running in the way that it needs to be, but you'll also have a more creative, expansive mindset in doing that.

Michael Krigsman: Is this a tension between thinking about innovation versus efficiency?

Amy Webb: Yeah, I know a lot of this stuff just sounds squishy. I totally get it. I'll go back to Pierre Wack for just a moment. This was the guy in the '70s who was at Shell.

Shell in the 1970s, right? Full of men in suits doing big, strategic thinking. Here comes Pierre who is super into Eastern philosophy and studying world religions. Nobody can grok him inside this organization. Yet, he was able to prove that adjusting some of how you think can lead to extraordinary discoveries.

I guess what I would say is I know there is a tension between immediate term and longer-term, innovation and execution. Those tensions exist. I get that.

I think the people who are our greatest future thinkers and some of the organizations that do the best job continuing to make their markets and to move forward actually operate in the middle of those two. They are dynamic. They're flexible. They are squishy in how they think.

My favorite example, I'm going to ask you this question, Michael, and see if you know the answer. The way that I describe companies is as pathfinders and bystanders.

A pathfinder company is positioned really well. It's got the right culture. It could be tiny. It could be huge.

No matter what disruption comes they are seemingly always prepared. Not only are they always prepared. They're also so far ahead of everybody else that they're making the market. What they're doing, the decisions they make, they trickle down to everybody else.

My favorite pathfinder company is Nintendo. Michael, any idea when Nintendo was founded?

Michael Krigsman: Gee, they've been around for a very long time, haven't they? I don't know the year, but it's been – God, they've been through so many different generations.

Amy Webb: Yeah, so many different consoles. Right, so that's my favorite question to ask executives, "When was Nintendo founded?"

Almost universally I get the same kind of answer, like, "Oh, yeah. They've been around for a while, like since the '80s, right? You know Mario, Donkey Kong."

I'm like, "Yeah, absolutely right, the '80s – the 1880s." Nintendo was founded before automobiles were on the roads. Everybody is always shocked when they hear that.

Nintendo originally was a company that made something called Hanafuda playing cards. I used to live in Japan. I lived there for many years. These are cards that are made out of a specialized paper. You required special inks. There was this entire value chain built around this company and this game, and they were very expensive, right?

At some point, you've got the radio. You've got electricity in homes. You've got a television set. What was so smart about what this company continued to do was that they were always thinking not about the next two years of our market, what the segment looks like, and who our competitors are. Yes, they were paying attention to that while at the same time thinking about, hey, this television thing, this is our competitor.

As it's emerging and nobody else is paying attention to it because it's huge and clunky and expensive and there wasn't a lot of programming – it was mostly news – Nintendo was looking at this thing thinking, "Ten years from now, this is going to cause us to go out of business." They just kept doing that over and over again.

What do we do? They help invent the console that you can plug into the television set to play the game.

Everybody is getting excited about games. What are they doing? They're thinking again, ahead, and they're noticing that people are no longer staying in their homes. There's this thing called the shopping mall, and it seems like teenagers might be spending more time in the shopping mall.

What do they do? They take this game that everybody is used to sitting down and playing and they create a stand-up machine that you have to pay, you have to put a quarter in, in order to play, and invent the video arcade.

Anyhow, so here we are in the year 2021. They're not the biggest company. They're not the biggest gaming company. They're not like Eve-online. They're not reinventing the mechanics, but they are still around. They've got very healthy margins.

What did they just launch? They just launched an augmented reality theme park. We don't have a lot of augmented reality yet, so it's a good example because this is a company that, like all of your companies, has to make decisions in the very near term, but they do that while thinking about where that future market is going to go.

Michael Krigsman: That's a fascinating example. I can tell you one thing. Nintendo is now high on my list to pursue to be on CXOTalk because I've interviewed many senior execs from many companies that were started in the 19th Century or early in the 20th Century. Of course, they're all tremendous innovators because clearly, they've adapted.

Amy Webb: Right. Nintendo, if you stop and think about it, this company shouldn't exist. They've been through two world wars, a Japanese economic collapse, the advent of the movie theater, of the television set. Over and over and over again, this company should have been killed by all of these different things, and they weren't.

By the way, they still make those playing cards. They never pivoted. They just evolved.

Michael Krigsman: What is it about Nintendo that made this possible?

Amy Webb: Again, this has to do with some of what we've been talking about and what I would call the hallmark of a pathfinder company. They're asking really challenging questions all the time for the purpose of challenging the status quo.

I walk into a lot of organizations and I'm almost always dealing with executive management. Way too many times I hear people say, "We're already doing that."

Great. I'm happy you feel confident that you are already doing [it]. You're not.

Having the confidence and the ability to say, "I'd love to know more. Help me understand more dimensions," things like that.

They do a lot of that type of work. They have a very broad aperture as they are looking at the future, so they're not just looking at the usual suspects in terms of their competitors. They're not looking at the usual nearly adjacent technologies and research areas. They go really broad, and they're trying to look for where there are changes.

They're very good at mapping and understanding forces of change, which is a skill that you have to hone. It doesn't just come naturally. You've got to intentionally do it. There's also a way for everybody to participate.

The other thing I see in a lot of companies is that the foresight function, so thinking about the future, oftentimes does not report into strategy. You've got your strategy folks who are really just doing three- to five-year planning, sometimes less than that.

The skillset that I have, you can learn but you have to learn it. Scenario planning isn't like writing a bunch of cool stories.

What they do is they tend to have young people or interns do some sort of cool hunting or looking for trendy things, and they've got no training. What's happening on social media or who is doing what on TikTok, they use that, and then they kind of have a loosey-goosey way of doing scenario planning. They wonder why the future doesn't show up the way that they thought it would.

You have to practice this. The analog to this, of course, is Blackberry, which, for a time, was making great technology but they were no longer hungry. They didn't think about disruption, and there were lots of people in the organization – I know because I talked to them – who were saying, "Hey, haptic devices, hey, MP3s, Napster, we should be looking at this stuff."

If you were to go back in time, I wouldn't have known that the iPhone was coming, but I could have absolutely told you that our phones would do more than send office messages, calendars, and stuff. Blackberry just wasn't methodically doing the work.

Building a culture of innovation

Michael Krigsman: We have a couple of interesting questions from Twitter. The first one is from Chris Peterson. He asks a really interesting question. He says, "Is there a pattern of culture and a pattern of bias at work with shaping those companies that are thinking forward into the future versus those that are more incremental or really focused on their P&Ls?"

Amy Webb: This is the middle ground, right? you can't take your eye off that P&L, and you've got to continually think about projections, but you have to be open to more variability.

We worked with a company two years ago whose financial projections used to be spot-on and suddenly weren't. The short end of the story is it had to do with the length of their supply chain and the fact that they had made a lot of assumptions.

They didn't have complete control over all of the variables in that supply chain. That supply chain, because managing the margins in this company was very important, they just kept going tighter and tighter through efficiencies, which left, at the end of the day, no room for anything to go wrong.

The kinds of things in their case that could go wrong were geopolitical changes that may pop up overnight, climate change issues, things having to do with transportation. They just never accounted for those things and so we saw the brittleness.

In their case, the biases had to do with process. They weren't willing to accept the fact that they would have to introduce uncertainty into their calculations. Once they figured that out and everybody was okay with it, now they're doing great.

Sometimes, the bias within the organization that exists is, "Our process has always worked. Therefore, it will always work." You know?

Michael Krigsman: We have another interesting question from Twitter. This is from Florent M. Hirwa. I hope I'm pronouncing your name [correctly]. He is in Kigali, Rwanda. That's interesting too. Florent asks, "What are some applications of smart contracts outside the creative industry?"

Amy Webb: Here's what I see happening with smart contract. I see people who are very creative. Especially people in the innovation space, they're coming up with all kinds of clever ideas that are really interesting that never land well within the organization because nobody sees an immediate use case or an immediate business case. Then what winds up happening is there is no prototyping.

There is a ton of options that range from digital ID systems. You could kind of argue that a lot of these digital passports, vaccine passports, are kind of a smart contract in spirit. Ranging from digital IDs (for the purpose of traveling, again, someday) but also if it's true that we're moving into digital realms in new ways and we've got new ways of interacting with each other, then we're going to need new ways to authenticate ourselves.

I think that the authentication and trust pieces of a smart contract are probably hold greater weight than just about anything else. There are some obvious use cases right now in remote.

We refinanced our house because the interest rates were pretty great. A lot of that was done using smart contract systems.

Then, of course, there's a whole other piece of this, which is finance: trading and settlements. The settlement side of trading is trying to get to faster and faster timeframes, you know fractions of fractions of fractions of a second. As some of this fractional ownership models, investment models (I meant), and things like NFTs and fractional NFT models, that's another interesting avenue as well.

Amy Webb on cryptocurrencies

Michael Krigsman: We have another really interesting question from Twitter. To me, this is a very practical question. That question is again from Arsalan Khan. He says, "Any thoughts on cryptocurrencies, and especially things like Dogecoin and others that we should be looking at?"

Amy Webb: We know that Fiat currencies are probably going to – we know that there is a lot of moment. There has been for a while in Singapore and in China. China is officially now launching some version.

I also lived in China when there were two bank-issued currencies, and that was kind of annoying because you had to remember what was what. It was physical paper at that point.

I actually think this is a huge opportunity for somebody, for some large organization somewhere. The concept of a wallet is still beyond the grasp of many people.

In the United States (this is not necessarily true of other countries) you would think that contactless payments—meaning you don't have to pull your credit card out of your wallet, or cash, you can just touch a device and pay—has hit some form of critical mass and it hasn't. It's still low double-digits. It's like 10% of transactions. It's a very, very low number.

Part of that has to do with people. Part of that has to do with the slow rate of changeover in all of the businesses, the places where you would use that currency, that money.

It takes them a long time to make the terminal change. If you're in a situation where you've got inventory or insurance, it's not as simple as just changing the terminal and making it work. There are a lot of handshakes on the backend that have to happen.

Here's why I mention this. It's not enough to have crypto. You have to be able to use them. You have to translate that into a system where you can receive something in return.

I think we're probably looking at a transition to something. Whether that's country, like Fiat-backed crypto per country or one global crypto—which I think is probably unlikely, but you never know—or Eastern and Western Hemisphere, you know, China-backed and U.S.-backed and European-backed, and Africa-backed, or something like that. I think we're in a transition period.

If the question was like, "Which one should you hold?" I will not answer that question.

Michael Krigsman: As far as the long-term trend goes, from what you're saying, it seems like there is an almost inevitable march but it's going to take a long time because of just the weight of corporate processes in every area that need to adapt.

Amy Webb: To some extent, it's that.

My husband is an eye doctor. He switched over from his old terminal to a new terminal because he wanted to get the newer system. He's way more into technology than I am. He was like, "Well, how hard could this be? I'm an engineer by training."

It turns out real hard because the medical record system and the insurance system didn't do the right handshake to the terminal. It was a nightmare. He tried for a month, and he finally just gave up and went back to the old system, which for a time was not doing contactless payment, even though he wanted to.

I'm just highlighting this because I think sometimes people like to blame big organizations or big institutions as the problem. I think in this case the problem is an extremely diffuse system with many different types of ways to take money.

Advice for Chief Information Officers

Michael Krigsman: As we finish up, how do you net all of this out for CIOs who are responsible for making technology purchasing decisions that address current, immediate problems but they also want success in the long-term for themselves, their organizations, and their customers?

Amy Webb: I think the biggest place for a lot of these decisions – again, my observation – is in the cloud. A lot of companies pre-COVID did not, I think, prioritize digital transformation the way they should have. They're a little late to the party. Now, a lot of decisions are being made under duress.

If you're in a situation where those decisions are being made under duress, you're going to have to figure out how to navigate that because there's a lot at stake, as you're making some of these decisions. Depending on the company, there are politics involved. There's trying to match your decision cycle with the cadence of your CapEx expenditure cycles, board approvals, and all that stuff.

I don't have an answer. There's no one answer because that's going to depend on too many variables.

Here's what I will say. Wherever you can, remind others that the decision cannot be made on a cost basis alone – it just can't. Nine times out of ten, that's what I see happening. It's cost basis or what you think you're going to get or confirmation bias.

X company is the biggest, therefore. Well, sometimes the biggest company isn't going to be the right fit for you. Some of this is a little bit of matchmaking and patience.

The other part of this, though, is you have to do two things at once. You have to make decisions in the near term while assessing the long-term. That is a challenging thing to do and you're not going to do it unless you are intentionally forcing yourself to do it. You have to ask others in the C-suite to do it along with you.

Michael Krigsman: Should we take one last question that's just popped in from Twitter? This is from Matt Carrasco. He says, "What is the long-term trend in instant communications, chat support? What needs to change to go from this is a great solution for support to convert it into something that can help sell clothes and collect?" Basically, broadening chat support. He adds, "Is no code or low code solutions an answer to this?"

Amy Webb: In the realm of synthetic media, which is deep fakes but for different purposes, so this is generative content. Chatbots are a version of that, but this is more holistic because we're talking about having an interaction with what looks very much like a person.

The ability to do that exists today. A couple of accelerants are in the works. I know we're all tired of staring at our Zoom screens, but all indications at the moment would say that this is here to stay because there's more flexibility, which means we're going to be looking at more than we were before. Not all the time but looking at people on screens.

If those people are synthetic, then that affords us some interesting new opportunities. There's a body of research showing that if you can recall the details of somebody's personal details, say their name, all of that interpersonal stuff that all of you know, that they are more receptive to criticism. They are more vulnerable, potentially. They are more open to being coached.

Imagine an AI hiring manager, an AI customer service rep, or an AI trainer who was built for everybody at the company but, once deployed, can learn about you and respond to you in real-time. That is a game-changer. That's not tomorrow, but for all of these companies that are just dumping resources into chatbots thinking that that's the end, what I would say is if you can convince everybody in the organization to see it as a beginning rather than the end, you will ride the next wave of disruption pretty well.

Michael Krigsman: All right. Amy Webb, thank you very, very much for taking your time to be with us here today.

Amy Webb: Thank you.

Michael Krigsman: Everybody, thank you for watching. What an interesting and fast show this has been. Before you go, please subscribe to our YouTube channel. Hit the subscribe button and subscribe to our newsletter. Tell your friends.

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