Connected Intelligence – Brain of the Global Economy

Nikola Tesla was one of the most brilliant minds to live on the planet. In 1997, Life Magazine listed him amongst the 100 most famous people in the last 1000 years. He was a prolific inventor, his discoveries revolutionized the world. He laid the foundations of the modern wireless industry. He could see years into the future. In his famous 1926 interview with the Colliers magazine[1] he said:

From the inception of the wireless system, I saw that this new a0rt of applied electricity would be of greater benefit to the human race than any other scientific discovery, for it virtually eliminates distance.  The majority of the ills from which humanity suffers are due to the immense extent of the terrestrial globe and the inability of individuals and nations to come into close contact. Wireless will achieve the closer contact through transmission of intelligence, transport of our bodies and materials and conveyance of energy. When wireless is perfectly applied, the whole earth will be converted into a huge brain, which in fact it is, all things being particles of a real and rhythmic whole.  A man will be able to carry one in his vest pocket.

He had not only envisioned the whole wireless phenomenon that we have witnessed over the last 40 years, but he even foresaw what’s to come after that. He was in essence describing the era of Connected Intelligence: Brain of the Global Economy where the sensors around us power the algorithms and intelligence to become the programmable brain of the global economy.

In the next 10 years, $1000 trillion will be created in global output and Connected Intelligence will play a pivotal role in shaping the existing industries and creating new ones. Players who position themselves to ride the new technology wave will benefit immensely. This was evident in a remarkable milestone reached in August 2016 – for the first time, the top 5 companies by market cap are all technology companies – Apple, Alphabet, Microsoft, Amazon, and Facebook. In the past 5 year cycles, no more than 1 tech company made it to the top 5. The shift to tech is also captured precisely in our 4th Wave Index before it actually happened.

The pace of new billion-dollar revenue companies is faster than ever. How will Connected Intelligence evolve? What will be the new trillion dollar industries? Where are the industry leaders making investments? How is China shaping the global tech landscape with new business models and consumer trends that are ahead of the west? What are the opportunities that are disguised as challenges?

We see the disruption across many dimensions. The number of startups with billion-dollar valuation continues to rise. In 2013, there were 42 companies in the group. By mid-2016, there are 144 startups valued at $1 billion or more.[2] Of course, valuation is one thing and revenue is another. We track mobile companies which are generating a billion dollars or more in “actual” revenue. This number has also seen a sharp rise over the last few years. There were only 9 companies in the elite group in 2012. As of 2016, there are at least 77.[3] These companies come from all over the world. While US dominates, China, Western Europe, and India have substantial increase in their billion dollar companies.

As we said in our inaugural Connected Intelligence[4] paper, the confluence of sensors everywhere with smart algorithms gives us the ability to program our lives better, the enterprise supply-chain and operations better. When we are able to interact with physical objects in an intelligent way, paradigm shifts happen. Paradigm shifts are change industries and ecosystems. If we just analyze some of the industry sectors, we can see and quantify the level of disruption. We looked at books, advertising, taxi, and music, and in each case the old ecosystems are getting dismantled and are experiencing rapid declines in revenues while the new ecosystems powered by mobile are shaping the future of their respective industries. Each of these disruptions are powered by a set of capabilities in the devices, network, and applications – forming the core DNA of the digital ecosystem.

In most of the cases, digital actually helps expand the industry revenue base rather than shrink it. For example, when we looked at the impact of Uber and Lyft in the LA market, the legacy taxi market had a negative impact on the local economy to the tune of $28M but Uber/Lyft yielded a boost of $85M thus expanding the market by $57M. This is likely to repeat itself in all major cities.

Uber wouldn’t have been possible without the chipsets that powered the smartphones and the LTE networks that carried the traffic and made the user experience better. With each set of technical capabilities, we see a rise of new generation of entrepreneurs connecting the dots to something that was previously thought impossible, giving birth to new ecosystems and disruptive ideas that can scale around the globe.

That’s another feature of the Connected Intelligence Era – the serendipity of disruption. In our work around the globe, we have seen startups bringing solutions to local problems using the same toolset. In some instances, the toolset could vary but entrepreneurs adjust to generate mind blowing answers to tough questions. The availability of broadband network and smart sensors (including smartphones) is a critical platform layer. Its availability connects and spawns new businesses. In fact, one can predict the GDP growth of a country based on how connected the society is.

Any corporation can feel the pulse of the business by looking at the data emanating out of their supply-chain sensors. While Connected Intelligence is the brain of the global economy, data is the heartbeat. Connected Intelligence empowers the brain to think. Data enables the economy to hum. The relationship between data and intelligence is a critical one. It is shaped by algorithms, by experiences, by our responses, by a constant feedback loop that adapts as it learns and improves, it can be whatever we want it to be. That’s why it is critical to keep the security and privacy aspect of Connected Intelligence on top of our minds and design new services and applications with the protection of data and preservation of privacy as key tenants.

The Connected Intelligence phenomenon is being felt across the industries. New capabilities such as IoT, AR/VR, AI, messaging platforms, LTE-A, 5G networks, Low power wide areas networks are accelerating the introduction of technologies and business models at an unprecedented scale. The boom that ushered the smartphone era is not powering the drones, autonomous cars, and robots. Thus, Connected Intelligence is laying the foundations for the technology growth curves of the next 20-30 years.

Only a few years ago self-driving cars and drone delivery were mocked at and considered work of science fiction. To some extent we are already there with these capabilities as we test and prod the boundaries of what’s possible within the confines of artificial regulatory perimeters. The new generation of kids will grow up in a sensor-powered world. It is quite possible that a kid born in 2016 might never need a driving license and visits to a hospital are as rare as the discovery of a new planet.

The wireless industry is marching towards 5G and we might start to see a big upgrade in performance with network speeds in Gbps. The data produced and consumed continues to grow at a breathtaking pace. As the number of sensors/human increases in the coming days and months, data requirements will change as well. How we economically design the networks will be critical in how the application layer takes advantage of the upgraded toolkit.

Smartphones and LTE network enabled hundreds of new businesses around the globe. What will IoT, AR/VR, AI, 5G enable? What are going to be the puzzle pieces to create billion dollar businesses? How are we going to connect the dots?

Tesla stated in the same interview, “When the wireless transmission of power is made commercial, transport and transmission will be revolutionized.” He was way ahead of his time, he could see clearly into the future and could “connect the dots.” In fact, he wrote a drone patent back in 1898[5] and foresaw a future of unmanned machines. Many of his predictions and foresights have come true. Mobile Future Forward takes the inspiration from his genius and indefatigable belief in disruption.

Connected Intelligence is already shaping the world in different ways. The network nodes that can capture the global economic flows at the microscopic level are providing us constant feedback. As we march towards autonomous intelligence where the mundane tasks and decision making can be handled by computers, we will end up redefining practically every industry and by extension the global ecosystems at large. Connected Intelligence is indeed become the brain of the global economy.