Are the new age business supply chains turning Ouroboros?

Robert H. Goddard, the rocket pioneer, after whom the Goddard Space Flight Center was named once wrote about long-duration interstellar journeys in his essay “The Last Migration”.  He speculated that human race will send out expeditions into the regions of thickly distributed stars, taking a condensed form of all the knowledge of the human race. Pondering on the concept, I was attending the class of Prof. Sergio Chayet at WashU, where he introduced us to the concept of Just-in-time production. In the class, I realized that the business supply chains of the modern era work in a linear fashion. We produce and consume in endless supply chains. The business mantra that runs our traditional economics is the extraction of maximum profit from existing resources.

To support the model of sustainable profitability, we rely on a linear approach. We take, we make and we dispose of. To achieve profit overtimes (we do not bother whether it is sustainable or not) we transformed our economy into a cowboy economy. Since the time we settled in civilisations, the cowboy economics created the rich and poor divide in the society. The cowboy economic principle is centred on taming and exploiting a seemingly endless resource frontier. This resulted in an exorbitant appetite for resources. According to International Resource Panel, a UN body that consists of scientists and policymakers, estimates that primary materials extracted from earth rose from 22 Bn tonnes in 1970 to 70 Bn tonnes in 2010 and by 2050 the planet will need 180 Bn tonnes of material a year if the trends continue.

Is this a sustainable use of resources? It is a good time for every corporate citizen to think before it gets too late and the changes become irreversible. If we could portray the human civilization on a spaceship earth travelling to a ‘destination’, can this economics survive till we reach our destination? Is this the time to rethink our business models? We cannot allow modern business to become Ouroboros – the serpent that eats itself.

Based on the simple concepts of waste reduction, reusing and redesigning product and process flows, there is a possibility that we could still reach our ‘destination’ in a sustainable manner.  We can preserve and enhance natural capital available for future generations.  This is the concept of Circular Economics. According to Ellen Macarthur Foundation, a circular economy is restorative and regenerative by design and aims to keep products, components, and materials at their highest utility and value at all times.

The concept is congruent to the living world. There is no waste. It is just the flow of material from one form to the other. Energy is provided by the sun, things grow, then die and nutrients return to the soil and the system circulates. It is a system that has evolved over 4 Bn years. But what about human technology that runs our businesses? In the modern era when the new technology comes up, we ditch the old one. Let it be our mobile phones, Televisions, refrigerators, washing machines and the list is endless. When the iPhone X is launched no one needs the old one and Apple stops the support of the older models. Each time we use and discard, we are eating into a finite supply of resources. As an output of this process, we produce toxic waste. Technology is evolving at a much faster pace. So is the waste that is generated as part of these business ecosystems. By 2030, 3 Bn more middle class consumers will have access to latest technology. This is fantastic, but at what cost? Can the current way of consumerism be transformed by circular economics? If yes, firms can recirculate their products without any waste in their production, distribution and consumption supply chains. If companies stop selling products and start selling services, we will see this change. For example, if Apple starts selling its smartphone as a service instead of a product, the firm will have a motivation to circulate its older models within the supply chain and reduce the push of newer versions to the market.  In such a scenario, the customers can enjoy the latest technology without creating a perceivable dent on resources.  Consumers will be more interested in services and performance of such offerings rather than the product. This change in the business mantra can motivate firms to consume resources in a sustainable way and we could reach our ‘destination’.

Emergence of the New five data sisters

On August 28, 1928, in Achnacarry Castle of the Scottish Highlands, there was a private appointment among a Dutchman, an American and an Englishman. If anyone knew the potential of oil, which could turn the fortune of corporations and empires, it was them. The Dutchman was Henry Deterding of Shell, American was Walter Teagle of Standard Oil the current Exxon and the Englishman, Sir John Cadman from Anglo-Persian Oil Company, soon to become BP.

With fuel-hungry ships, planes, and tanks on one side and the fast developing automobile industry on another side, when the oil became “the blood of every battle and economy”, it was these corporations that the oil men founded later known as the seven sisters, became the cartel that waged the merciless contest of money. There were times prior to the 1973 oil crisis when these Seven Sisters controlled around 85 percent of the world’s petroleum reserves.

Now let us consider the same perspective for the data. Since the time of counting, we have used information for making decisions. But it was never before this information used to be so concentrated in the hands of a five new emerging sisters. ‘Google’, ‘Facebook’, ‘Amazon’, ‘Apple’ and ‘Microsoft’. If we consider Google, there are over 100 million active users. It also has youtube with 1 billion unique monthly visitors. Facebook boasts around 2 billion monthly active users (Let alone the Instagram and the marketplace). Apple too has over 1 billion devices that are actively used around the world. Over half of the product searches happen on Amazon that has over half a billion active users. As far as the oldie Microsoft is concerned, 1.2 billion users use their product globally across over 100 countries. With Internet of things (IoT) developing, the world we survive is turning to a mine that churns out the new precious commodity data.

So what is the data that these companies are collecting from their users? They gather the information such as ad clicks, device details, email addresses, facial details, IP and location details, phone numbers, personal profile, search queries and the time information.They do it through cookies, device tracking and third party codes that we may not be much aware. We may not be even so much concerned about this information. But it makes a lot of logical sense for these companies to understand and predict the user behaviors. We will understand their power when PWC estimates the addressable market size of data to be at $1.3 trillion by 2019.

The question that whether the data is the new oil is not new. The data explosion has been predicted since 2006. There are 3 characteristics that are common for any resource that become such a powerful economic driver.

First is it’s omnipresence. If you consider the oil, it is not just a driver of our car. It is vital to the production of many everyday essentials. Oil’s refined products are used to manufacture almost all chemical products, such as plastics, fertilizers, detergents, paints and even medicines, plus a whole host of other products that you might not expect. Overall only 60-70% of the oil is consumed in the transportation sector that includes land, air, and water. Balance is consumed in chemicals and pharmaceuticals industry.

If the same parlance is taken, the mobile and smart devices that we use ever day has become the opportunities for interactions that produce customer data. The 2017 global edition of the GSMA’s ‘Mobile Economy’ report reveals that there is a 5 billion mobile subscriber base out of the global population of 7.5 billion. This is massive !!

Second is its economics. Through its extensive supply chain, the oil and gas industry employs hundreds of thousands of people and make a major contribution to the global economy in terms of global trade and technologies. Over 5-6 million people work directly in this industry globally and several million more indirectly. According to market research by IBISWorld, a leading business intelligence firm, the total revenues for the oil and gas drilling sector came to $5 trillion in 2014. 2015 estimates for global gross domestic product range between $77 trillion and $127 trillion. The oil and gas drilling sector make up between 6% and 8% of the global economy.

If we take the statistics, according to Forrester Research, Global tech industry is over $3 trillion and approximately it is over 3% with an average growth rate of over 5%.

The third is the potential for high correlation to the global economy. If we look at the correlation between the oil prices and the global economy, it is fairly complicated. The prices of the oil determine the fiscal and monetary policy of the governments.The fluctuations of its price could severely impact the corporate and sovereign ratings thus driving the investments in and out of a country. This is a direct impact on the common man whose daily life is impacted in all ways by the fluctuations of this commodity.

Similarly, if we take the impact of data, it is the dark horse that drives the consumer behavior. The targeted advertisements and customized product launches for specific user requirements are the ways to go.

But can we expect the nationalization drive that happened in the oil-rich nations will not happen again? The way in which governments responded to the 7 sisters, by nationalizing the oil resources, we possibly could see the nationalization of data. Since the new 5 sisters are extracting this resources free of cost and profiting from it, it may not be long enough to see this transformation. But I never expected that the history would repeat so perfectly.

Finance – A theory of transition to a new world

Working in the finance sector, possibly the only sector that I had worked since graduation, I have encountered a systematic shift in the perception of the jobs. I believe that we are in an era of transition of the financial industry for good or bad. When I joined my initial assignment 15 years back, I was working on trade solutions. We used to have over 20 people who were designing customized reports and running them at a specific time for various businesses across various continents. The requirements were flowing to refine the solutions so frequently that a significant amount of resources were deployed to tackle the future plans. Within a few years such a futuristic team underwent a significant headcount reduction and now I believe that technology itself does not exist. This is when the quote of Bill Gates becomes prominent. ‘We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten.’

When I joined my initial assignment 15 years back, I was working on trade solutions. We used to have over 20 people who were designing customized reports and running them at a specific time for various businesses across various continents. The requirements were flowing to refine the solutions so frequently that a significant amount of resources were deployed to tackle the future plans. Within a few years such a futuristic team underwent a significant headcount reduction and now I believe that technology itself does not exist. This is when the quote of Bill Gates becomes prominent. ‘We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten.’

This is when the quote of Bill Gates becomes prominent. ‘We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten.’

I had been fortunate to work a good portion of my life in understanding the investment perspectives of money. So let us understand money from that context. Being an industrial engineer, I always have been enthusiastic about the time-motion study. It is a business efficiency technique combining the works of Frederick Winslow Taylor and Frank and Lillian Gilbreth. This integrated approach to work system improvement is known as methods engineering and it is applied today to industrial as well as service organizations, including banks. Let us see how the transition could happen through a basic time-motion study of how an investment professional would approach an investment.

The first step for anyone is to get stock of your finances and spending pattern. With the intrusion of privacy through smartphones and data crunching and machine learning capabilities, the firms that we depend on for our everyday needs can predict our requirements to a reasonable extent. If our needs are translated into their sales, this information can be treated as a sales input for a company. In other words, it could serve as a leading indicator for one’s investment. This could create a vicious cycle by which users of a specific product could be made to buy the stocks of those products that they consume. These stocks would be recommended by very same companies that took the data from the same set users. Is it going to be fun? Can we say that this data tech is going to the next investment advisors?

As on today, we have many applications on our fingertips that could tell us the amount that we had spent, are spending and will be spending. If these data companies can build a predictable certainty on this consumption pattern, will there be a concept of a market? Will there be market buy and sell on risk and uncertainty? The result could be that one may not trade, he could just put money for a reasonably predictable future. Will that be an end of speculation in markets, which our modern day banks have invented?

The second step is usually to understand the products that would make sense for the user. As I mentioned today we have applications that can fairly predict the outcomes of investments through game theory and scenario analysis. With the enormous information that is being generated by us on a daily basis, the suitability of the products and judging our risk tolerance will become much easier. The feeder information for this judgment would be our own data provided through various means to the data aggregators of the internet such as Google, Facebook, Apple, Amazon, and Microsoft.

For your information, 95% of global data was created in the last 3 years. It is expected that by 2020 the digital universe – the data we create and copy annually – will reach 44 zettabytes or 44 trillion gigabytes. This is the data that would drive the future of money.  Anyway, this data would be input for the setting one’s goals and determining your risk tolerance. So tomorrow your decision to buy a car or a decision for a holiday could be taken by these technology companies. The days are not far, that even the style of investment and the returns that one can expect from a specific type of investment can be determined with a fairly good accuracy. Once this information is available to the public through, let us say ‘open source investment codes’, who would want to pay for the current products, that our banks and financial institutions sell as exotic products.

It would be something like our Android phones, which almost monopolized the mobile industry. We are currently on the Nokia Symbian environment as far as financial industry is concerned. Once we have a platform that would enable the users to transact, select, deploy, track, review and rebalance money on a universal level, that would be the death knell for the current financial industry as we see it today.

This is a pivot moment for the financial institutions. It could be the block chain, peer to peer services, internet of things, wearables or/and augmented reality, but I am sure that the future of money in the next 15 years will not the same that we see today. It will be a great concoction of these new age thoughts. Such innovations could either be with the current financial institutions or against such institutions. If they are on the other side it would be the end of such institutions as we see today.

Technologies in the new era of agriculture

I had been on a casual chat with my brother in law, who is running agri-business in Africa. I was surprised with the efficiency with which the agricultural economy was running and how the farmers are even using drone technology to do aerial surveillance of their farms. Curious on these advancements, I decided to do some research on the new developments in the field of agriculture.
The agriculture as a sector has a mammoth problem in hand – to feed the 9.6 billion people (as per FAO prediction) who are going to inhabit the planet by 2050. If this number is achieved by our efforts, then the food production must increase at least by 70% from the current levels. This has to be achieved despite the limited availability of cultivable lands, increasing need for fresh water and change in weather patterns that would come with the impact of climate change.
There are a few technologies that I found interesting and could change the way the food comes to our table. Have you ever imagined what is the average time for a newly harvested apple to reach to your table? One week, one month, three months..sorry! On an average, it takes around eleven months to reach your table. By that time you can be pretty sure that it is just a sugar ball rather than a fruit rich in antioxidants. So what if we could do a teleportation of such food items from one corner of the world to another corner. It is not a new Starwars movie in making.
Through the Open Agriculture Initiative at MIT Media Lab, we have made personal food computers possible. This could possibly make you and me the farmers of the future. This is a tabletop-sized, controlled environment provides agriculture technology platform that uses robotic systems to control and monitor climate, energy, and plant growth inside of a specialized growing chamber. By manipulating climate variables such as carbon dioxide, air temperature, humidity, dissolved oxygen, potential hydrogen, electrical conductivity, and root-zone temperature we will be able to yield various phenotypic expressions in the plants, means we would be able to create a “climate recipe” suiting our taste. Through this project, this information can be shared across the globe on an open architecture platform to develop customised fresh vegetable and fruit recipe.Soo tomorrow we could have an apple made suiting the crispiness and sweetness customised for our taste buds. It could potentially allow farmers to induce other abnormal conditions such as drought and saline environment producing desirable traits in specific crops that wouldn’t typically occur in nature.
Another silent breakthrough happening is the creeping of Internet of Things (IoT) to the agriculture. We have started to use remote sensing technologies to make agri-farms more intelligent – means to make smart farms or feedback farms. So how do such farms work? These farms use remote sensing technologies that would observe, measure and respond to inter and intra-field variability in crops using the data gathered from farm and crop yields, atmosphere and soil-mapping, food and fertiliser consumption and weather data and apply feedback to the support systems. Such information collection is done not just in farming, but also in livestock and fishing. There are companies such as Anemon from Switzerland and eCow and Connected Cow from UK that tracks the health of livestock and recommend live solutions to the owners.Similar technologies are coming in the fish farming too. Eruvaka from India has developed a system that would control pH, dissolved oxygen, physical composition of water thus helping the water quality to be maintained effortlessly in aquaculture.
The main concerns that could come in implementing such cutting edge techniques are the ownership of data and the issues in communicating the technicalities to the farmers. In 2000, there were 525 million farms on record, out of which not a single farm was connected to the Internet of Things. IBM expects that by the year 2025 with the same base of 525 million farms, there will be 600 million sensors in use at these farms and by 2050, there will be two billion sensors used in 525 million farms – representing a major shift towards technological advancements.
Another development that would be of my interest is the one that has been developed during the interplanetary exploration endeavours of NASA in the late 60s. Since the travel time to Mars could take a year or even longer and the space on board and the resources were limited, NASA had figure out how to produce food with minimal inputs. It involved single-celled microorganisms that used hydrogen from water and the carbon from the carbon dioxide exhaled by the astronauts and converted into a nutritious, carbon-rich crop and eventually to a meal. The types of microbes that they used were called hydrogenotrophs – nature’s supercharged carbon recyclers. These organisms created a virtuous carbon cycle that would sustain life onboard a spacecraft, thus creating a closed-loop carbon cycle.
How beautiful would it be if we can convert the increased carbon levels in our atmosphere to edible food and solve the problem of hunger? To cope up with the incoming demand of the food, I believe the modern agriculture simply cannot sustainably scale to meet that demand. We could use the existing land resources to get better outputs through the new methods of the web and dig out the techniques that could have been used for our interplanetary expeditions.
The future of food is not about fighting over what can be done and what cannot be done. The future of food is about networking the billions of farmers and the consumers and empowering them with a platform to ask and answer the question, “What if?”

Economics of fashion and pollution

It is my daughter’s holy communion and my entire family was busy in getting the best fashionable attire for her. When I had the first look of the attire it was soft as silk and was magnificent. Angels would shame seeing her in that attire. As my usual practice, I was curious to know what was the material that was used for making such a beautiful attire. The content list detailed it out as 70 percent polyester and 30 percent silk. I did not take it much seriously when I saw the attire. But over the evening, I just thought of checking out what is the impact of such synthetic fashion polymers on the environment.

Over the past few decades, there has been a major shift in the materials chosen by manufacturers, designers and consumers for the clothes they are going to work and wear. There were times when we had created trade routes for the finest silk. We also know how cotton played a central role in shaping the modern social and economic institutions including the United Stated of America and the United Kingdom.

Since the arrival of NYLON the first synthetic fibre, fifty years ago, synthetic and man-made materials have taken centre stage. As of now, industry is filled with polyester, acrylic and nylon. The shift is not irrational. Synthetics are cheaper and easier to produce in large quantities. Even though these materials are good for the bottom line, it is damaging the environment in a big way. Considering a number of pollutants expelled by the clothing and apparel industry, from the estimates of Forbes, the industry is responsible for over 10% of global emissions, an estimate that gives an idea of the grand scale we are talking about.

The plastics are made from the petroleum gases and petroleum liquids, which are by-products of petroleum refining. As per rough estimates by OPEC, in a single year, almost 70 million barrels of oil are used in the manufacturing of polyester alone. This includes the consumption of oil both as a raw material and as fuel to generate the necessary energy used in the process. Globally we consumed 100 million tonnes of textiles in 2016. In that, over 65 million tonnes were petroleum based. As highlighted in Elizabeth Cline’s Overdressed: The Shockingly High Cost of Cheap Fashion, this quantum of production requires 145 million tonnes of coal and a couple of trillion gallons of water.

On the consumption side, in developed economies, it is estimated that each consumer buy anywhere between 60-70 garments every year and in developing economies it is around 20-30 garments and possibly in underdeveloped countries it may even be 0-5 too. This wide disparity of the fashion is supposed to encourage us for recycling the clothes. But do we do so?

According to the Environmental Protection Agency, 84 percent of unwanted clothes in the United States went to either a landfill or an incinerator and not to recycling. What is the impact? If we are talking about natural fibres, unlike banana peels, these natural clothes can’t decompose. The chemicals used in bleaching, dying and printing leach from the textiles and improperly sealed landfills into groundwater. The incinerators also release toxins into the air. The agency estimates that if the trashed textiles are put into a recycling program it be equivalent to taking 7.3 million cars and their carbon dioxide emissions off the road. The synthetic fibres, like polyester, nylon and acrylic on the other end take hundreds of years, if not a thousand, to biodegrade.

After this understanding, I am not so sure whether I should be in shame or the should believe that the angels would shame.

Possibly the closed-loop textile recycling could be an answer where the technology will enable a circular flow of resources in textiles. If we could separate blended fibre garments, dyes and other contaminants thus producing fibres comparable in quality and price to that produced from virgin-derived resources, the technology could be revolutionary. Tomorrow may come where we could get a discount on purchases for returning our own worn garments and could get fresh fashion made from old fashion.  Adidas, Levi’s, Nike and H&M are leading this game and would be the firms that could impact the future of what we wear and not the traditional Prada, Burberry and Gucci.

Universal Basic Income – all pay and no work

How do you feel when you get paid freely for doing no work? In my previous post, we had discussed the possibility of Universal Basic Income (UBI) proposed by Thomas Paine – the price tag that we have given for the new era of the unemployed because of the emergence of automation and technology. It may surprise you to know that a partial UBI already existed in Alaska since 1982 and that a version of basic income was experimentally tested in the United States in the 1970s.

So let us understand the dynamics of universal basic income. A study, released by Oxfam, showed that just 57 billionaires in India have the same wealth as that of the bottom 70 percent population of the country. To give a global perspective, just 8 billionaires have the same amount of wealth as the poorest 50 percent of the world population. This statistics gives the extent of global income inequality. Now wonder we have just 32 million of 3210 million population of the world owns over 40 percent of the world wealth.

Anyway, what is the need of this universal income? It is predicted that automation will create nearly 15 million new jobs by 2025, but at the same time, wipe out nearly 25 million. The 10 million who is going to lose the jobs in the process would be the people who would find it difficult to upgrade their skills or those who are too old to switch the jobs. But how would they survive? Will the world of technology be morally responsible for supporting them?

Even some of the biggest technology tycoons including Elon Musk who are talking about changing the world for the better seem deeply concerned on what the very same technology could do to jobs in the long haul making universal basic income “necessary.” It is not just the individuals who are concerned about this. The entire political spectrum is concerned about this huge income disparity. The idea of unconditional or universal basic income is like social security for all. The cause of this thought is not just from the rising income inequality arising from technology dominance. It has the origins from the decades of stagnant wages, the transformation of lifelong careers into sub-hourly tasks, and world-changing events like Brexit and the vision of Trump. All of these concerns are pointing to the need to start a permanent income guarantee for everyone that could take care of the basic needs of an individual.

How will this make sense in the new economy? If we look at the operational aspect of this concept, it is a negative tax. An interesting process in which those earning below a certain point are given an additional income, and those earning above a certain point are taxed on additional income. To cut it short, even Ambani would receive the same amount as a person below the poverty line. Only difference it that Ambani will pay far more than that amount in new taxes for the government to pay for it.

But what about people then choosing not to work? Isn’t that a huge burden too? It is an interesting topic to debate. Let us look at implementing this in a developed market like the US where the data is handy. According to Gallup in the US, 70% of workers are not engaged in what they resulting in a productivity loss of around $500 billion per year. With UBI coming in, this disengaged workforce will say “no thanks” to the labour market enabling an opportunity for the rest of the people who want to do the jobs they want. The result is a transformed labour market of more engaged, more employed, better paid and more productive workers. Fewer people are excluded, and there’s perhaps more scope for all workers to become self-employed entrepreneurs. In addition, there are proven positive effects on social cohesion and physical and mental health.

Based on the evidence we already have and continue to build with the trial run of such a scheme in Mongolia, Finland and India, I firmly believe unconditional basic income as a new equal starting point for all. For resource-rich countries like Kuwait and Saudi Arabia, it will be an efficient method of utilisation and transfer of resource incomes. For populated countries like India and China, it will help the reduce the leakage of subsidies provided by public welfare distribution.Lastly, in developed economies, it will compensate for the advances in artificial intelligence, robotics, and other technologies that have questioned the future of work.

In addition, there are proven positive effects on social cohesion and physical and mental health. Based on these evidence we already have and with the trial run of such a scheme in Mongolia, Finland and India, I firmly believe unconditional basic income as a new equal starting point for all. For resource-rich countries such as Kuwait and Saudi Arabia, it will be an efficient method of utilisation and transfer of resource incomes. For populated countries like India and China, it will help to reduce the leakage of subsidies provided by public welfare systems. Lastly, in developed economies, it will compensate for the advances in artificial intelligence, robotics, and other technologies that have questioned the future of work.

If things work out as planned by the governments, we might have a better place to live with more equitable distribution of wealth.

In search of efficiency – financial exclusion and technological unemployment

Every day we hear about the firms that try to make the world a better place. The new age technology firms want to erase the sources of inconvenience and delay that irritate their consumers. Every time I take the ride-hailing services of Uber to avoid the waiting time for taxis, the Book my show to avoid the queues in the cinema halls, and pay through PayTM to avoid the inconvenience of cash, I always hear about operational efficiency. Such applications claim to bring convenience for the users and run campaigns on their ethos of innovations.
But are they sincerely doing what they are supposed to solve? Do the end users need such innovations? Do these product innovations eliminate too much of hassle? In short, are they aiding society rather than harm?
Let us take a recent economic hype created by the politicians and central bankers – the demonetization. When I went through the pain of demonetization, I realised that it is not just Indians who are suffering through the pain of cashless economy. This time when my quarterly debit card statement came, I scrolled through it. To my surprise hardly there was any cash debit from my account. Enormous emphasis is placed on improving online infrastructure and online activity, particularly in the Banking and Finance sector. When we are moving so aggressively to the presence-less, paper-less and cash-less economy, we tend to forget a few fundamentals.
Many of us are happy to tap cards or phones to get to a taxi, buy a coffee or pay for groceries. But it raises the prospect of a time when we no longer carry any cash at all.
This results in no spare change for the busker on the streets, the person sleeping rough in need of a hot drink, and the donation box. This might be the rise of a cashless nation that would be mean with street vendors, small merchants and the poorest inhabitants who cannot afford the instruments of so-called convenience. It may so happen then we may further divide the mainstream society based on such media of convenience – The traditional and the modern. The societies that are in dearth need for the financial inclusion may put pressure on the same traditional who are to be banked and signed up to the financial system through financial inclusion. Many of such poorest traditional are likely to remain outside of that system creating a bigger danger of financial exclusion.
In a keynote delivered at Mobile World Congress by Ajay Banga, Mastercard’s CEO spoke about the growing global risk of creating islands, where the unbanked traditionals transact only with each other. According to Fung Global Retail & Technology, even in Sweden and Netherlands that could become the world’s first completely cashless society, significant enthusiasm gap has emerged between the traditionals and the moderns.
Now let us look at the second aspect of automation and convenience. To give a perspective, a report put out in February 2016 by Citibank, in partnership with the University of Oxford, predicted that 47 percent of US jobs and 35 per cent of UK jobs are at risk of automation. In China, it’s a whopping 77 per cent, while across the OECD it’s an average of 57 percent. And three of the world’s ten largest employers, Foxconn, Walmart, and the US Department of Defence, are now replacing their workers with robots.
Predictions that automation will make humans redundant have been made before. During the Industrial Revolution textile workers, protested that machines and steam engines would destroy their livelihoods. The difference between the previous waves of automation and the current one is that workers had the option of moving from routine jobs in one industry to routine jobs in another in the earlier. But now the same data techniques that allow companies to improve their marketing and customer-service operations also give them the raw material to train machine-learning systems to perform the jobs of more and more people.
Are these developments leading to the concept of Universal Basic Income proposed by Thomas Paine, the 18th-century radical? Is this the price tag that we have given for the new era of the unemployed? Need to wait and see how the technologists, governments and central bankers would tame this problem.

Agglomeration through hyperloop transport

A few months back I had been to a prominent hospital since my dad had to undergo an orthopaedic surgery. During my stay at the hospital, I got quite accustomed with the staff and they showed me an uncommon tranport mechanism. It moves the patient’s blood samples and prescription medicines across the hospitals through Pneumatic tubes. They are systems that propel cylindrical containers through networks of tubes by compressed air or by a partial vacuum. Even though it is an age old technology, of the late 19th and 20th century, I was impressed with the precision and the swiftness of the transport. Can such an integrated system be the framework of our future transport? Can this be the older working model of the proposed hyperloop powered by pneumatic energy?

Since the introduction of trains and cars in the early 19th century, nothing much has changed in the industry. We still rely on the modified forms of such transport mechanisms. But is the future going to be the same in the coming decades?

The transportation sector as we see it is around 5 trillion dollar industry. In the next few decades, it will be one of the industries that may see innovations. Such innovations could include driverless cars and public transports, intergalactic or interstellar travels and hyper loops. The hybrid of a Concorde and a railgun and an air hockey table – the hyperloop is expected to take the centre stage of this transformation. Even though it is not an innovative concept, the idea has gained enough of traction. Even India plans for its working hyperloop in the coming decade!  The first outlay is expected from New Delhi to Mumbai in 70 minutes flat, or three times faster than a commercial flight (a max speed of 760 miles per hour). The pilot funding of expected at $120 million. On the revenue side, a single tube could carry 1.44 lakh passengers daily at 40-second intervals with an average ticket price of under Rs 600 (around 10 dollars).

So how does it work? According to Elon Musk, the propounder of the system, it is a tube over or under the ground that contains a special low-pressure environment. The cars are propelled through this tube with high-speed fans that would compress and push the air for their propulsion. These cars would be floated in the chamber with Air bearings that would make these capsules to levitate in the tube to reduce friction. The entire system will be driven by solar power.

Now let us look at the economics of this transportation system. According to World bank the per-mile cost of building this loop is pegged at around $40 million per kilometre compared to High-Speed rail project at $56 million per km.

Can this technology play a bigger role to play in the future of freight transport too – an industry that powers the global trade? Given that we’re planning to move containers and pallets on-demand at speeds far in excess of today’s rail and highway options and far less expensively than by air freight, an integrated framework of such seamless nodal transport would be the future of not just human transport but of the goods too. This will reduce the inventory costs and have a better supply chain around each nodal city. Technically this is mentioned in economics as agglomeration – clustering of people and firms. This can lead to more innovative delivery mechanisms of medical/perishable goods and motivate regional economies for greater specialisation, thus reducing the overall cost and quality of global freight transport.

Future of organ transplantation

A few days back, I came to know about my cousin in his 40s who is planning to get his kidney transplanted. He had an acute kidney failure because of his lifestyle and was waiting for a kidney from a donor. I was disappointed by seeing his pain and the inconvenience caused to him by dialysis. This is not just one story, we have millions waiting across the globe for organ transplantation.

Humans have around 10 different organs in our body that can be transplanted. These include kidneys, heart, liver, pancreas, intestines, lungs, bones, bone marrow, skin, and corneas. As per the Donate Life Foundation, 80% of the global organ demand constitute the kidneys with an average wait time of over 3 years. In 2016, for the first time, the organ transplants performed in the United States alone crossed 30,000. But, as we speak approximately four times of that number still awaits lifesaving organ transplants. Furthermore, around 22 people die every day waiting for an organ. From an Indian perspective, 5 lakh people across the India die each year due to non-availability of organs. One out five need a liver, but only one in hundred receive it. Two out of five need a kidney, but only one in twenty receive it.

Even though 8-10 brain dead potential donors are available in Intensive Care Units of any major city hospitals around the globe, the taboo of the donation still constrain the effectiveness of donation. Can the new stream of tissue engineering change the fate of modern demographics?

Yes. The fundamental change of making synthetic organs is going to allow the ageing population of the world to work until a later age before taking their pensions – an imminent concern both in developing and developed countries. The stunning fact is that the majority of the organ transplants are happening over 40 years of age.

To give an economic perspective, today almost one in ten are over 60 years old. By 2050, one in five will be over 60. On the other hand, when we consider the state support for the non-working age population, in 1950, there were 7.2 people aged 20–64 for every person of 65 or over in the OECD countries. But by 2010 this support ratio fell to 4.1 and is projected to reach just 2.1 by 2050. This demographic shift will put undue pressure on the working age population. To avoid this scenario, the option left for the government is to reduce the support to older demographics. This will force the old age population to remain fit and healthy and thus remain productive up to an age over 80. This leaves the septuagenarians and octogenarians to maintain a healthy lifestyle and if required replace the damaged or non-functional organs with fresh ones which would be available both from donors or through tissue engineering. Since we have seen a macro perspective of donations, let us see how tissue engineering is going to solve this problem?

Right after identifying the pluripotency (ability to develop to different organs) of stem cells after cloning Dolly, bio-engineering has gone to a different level of creativity. A few days back, Organovo world’s first publicly traded 3D bio-printing company, announced the medical success of the bio-printed liver and kidney with promising results. Like the complex, multi-cellular tissues found within a person, these human tissues are created through cell division; they mature and integrate into the tissue, forming connections with surrounding cells and contributing functionality throughout their lifespan. As individual cells within the tissue age, they eventually undergo cellular senescence and death—much as they would in a living tissue inside the body. This is the ultimate approach to the shortage of donor organs – manufacture and transplantation of bio-artificial organs. The latest trend is the chimaera – a mixture of cells from more than one species growing together as a single animal – resulting in human organs being produced in other animals. By perfecting the art of growing such chimeric replacement livers, kidneys and pancreases inside the animal hosts, the organ shortage may end. It may so happen that we may be ordering a homo-porcine kidney on Amazon soon by end of this decade.

Artificial Intelligence and human sentience

It was a fine morning for the Sunday mass. I was quite moved with a very simple story that my parish priest shared during the mass. Once a guru was meditating on the shore of Ganges. It was clean air and pristine water around. Feeling the morning chill, he opened his eyes and was struck at the sight of a scorpion that was entangled in the roots of a large tree. It was trying very hard to get rid of the roots and it could not. Seeing its ill fate, the guru decided to help it — take the creature from the entanglement. When the guru approached the scorpion, it lashed its tail that had the venomous stinger. The guru was quite quick in response and escaped the sting. Despite the ill behaviour of the scorpion, the guru still tried to help the scorpion. The effort of the guru was noticed by a person who happened to pass by. He asked guru why he was trying to rescue the scorpion, despite he was so sure to get stung. The Guru answered, the scorpion is behaving as per its nature and I am behaving as per my nature.

On the way back from the church, I was thinking about the book of Nick Bostrom that I read – The Superintelligence in the context of the thought of guru. When there is a struggle between the conscience and the intelligence, there is a still a huge gap to be built in. Even though human has built artificial intelligence, we are not even close to understanding the existence of conscience.  If we are able to connect the machine learning powered Peta and Exa bytes of data that is being generated from the countless data sources, we may have a new species in making. Intelligence with the concept of self-replication could make the new species invincible. The self-replicating machines are nothing new for the field of technology. It was Rene Descartes who coined this term and presented to the queen of Sweden, Christina. According to him, the human body was simply a machine that has symbiotic existential relationships with similar internal and external machinery. The concept has been advanced and examined majorly by John von Neumann and these replicating systems received the name — von Neumann machines. He just worked on the concept note and later, mathematician Edward F. Moore proposed the first known suggestion for a practical real-world self-replicating machine through the artificial living plants that could use air, water and soil as sources of raw materials and draw its energy from sunlight via a solar battery or a steam engine. The idea received a huge interest from the space exploration agency NASA with the work of physicist Freeman Dyson, who proposed the idea of self-rectifying spaceships. With the emergence of rapid prototyping, that triggered the evolutionary robotics, the artificial replicating von Neumann machines are now considered to be a form of artificial life.

However, we can consider the evolution of such machines is two different ways. One can be much of a macro concept which applies to the space exploration where these machines would be evolving and adjusting themselves for externalities.  These mega machines would identify, resolve and implement the rectification procedure in case they encounter any problems. Such machines have a huge potential commercial space travel. Such installations can be incorporated in orbital solar arrays, interstellar environmental cleanup and terraforming (transforming a planet to resemble the earth) planets. On a micro level, this concept can be applied to a nanorobot, designed to perform a specific task or tasks repeatedly and with precision at nanoscale dimensions. They have applications in assembly and maintenance of sophisticated systems including the human body. Since they work on a molecular level, they can produce copies of themselves to replace worn-out units. Such a property of an organism with intelligence and without sentience may be belligerent. That could even be an existential threat considering scenarios such as the growth of robot populations at speeds that exceed bacteria –  the Grey goo – hypothetical end-of-the-world scenario involving molecular nanotechnology. Such self-replicating robots could just consume all matter on Earth while building more of themselves. If a single bacteria can become 2 million in 7 hours, then the projected growth rate on nanorobots could lead to 4 trillion robots in 14 hours.

Even though Grey goo is a construct of low-probability, high-impact outcomes from emerging technologies, there could be turn around on such an outlook. To give a perspective, we as humans are not so concerned about killing an ant, but in case we see a colony of ants that has a slight inclination to share our occupancy of space, we perfectly know what should be done to the colony. It is a perfect annihilation! If the machine intelligence as a species see the human civilisation a threat for their existence, who knows they might decide to do? The feeling –  the conscience – the sentience that we may find hard to understand and replicate through our brains may become one day the key to the existence of human race. Will we still allow the scorpion to lash its stinging blow on to us?