THE INDUSTRIES OF THE FUTURE

Alec Ross

Simon and Schuster, N.Y., 2016, 304 pgs., index. notes

Reviewer comment: Rather than a detailed description of all the industries that the author believes will profit most in the future, he gives the reader here a more generalized and even philosophical picture of how globalization and the explosion of computer based capabilities will transform the world, not only industry but also society, culture, economics and living standards. His description is based both on his own extensive personal participation in this transformation and very many interviews he conducted with leading personalities, whom he names and quotes at length. He also includes quotations from many individual sources from their published or oral remarks. The main industries that he describes in more detail are cybersecurity, geonomics, agriculture, robotics, and exploitation of 'big data' and 'machine learning. From an employment and investment recommendation point-of-view he writes that cybersecurity and cyberwarfare will be a huge industry. In general terms he appears to favor new, smaller companies created by young and ambitious entrepreneurs who 'get it' due to their growing up in the computer- information age. The larger and older companies and entire industries will be forced to adapt or they will fail. The chapter on geographical aspects of the future is comprehensive, including as it does his personal observations from extensive travel to many countries.

Introduction-The author discusses his career. Among other positions he was an information technology expert (senior advisor for innovation) in the U. S. State Department hired by Hillary Clinton to modernize the department's information processing - both hardware and software. (One immediately has to wonder what contact he may have had with her use of a private email server and system - not mentioned). He also worked in the Obama presidential campaign information organization that successfully developed and applied massive information processing to target the campaign's fund raising and 'get out the vote' efforts. This effort is described in fascinating terms. He has much experience from extensive travel to foreign countries in understanding the latest and future applications of 'big data' 'data mining' and information analysis in such varied fields as robotics, machine learning, cyberwarfare and applications to many basic industries such as finance and investment.

Chapter 1 - Here come the Robots - The author begins the chapter by noting the experience of Japan in which the population is, on average. growing older by the year and requiring more and more care for the elderly with fewer and fewer available workers. Japanese industry has been a leader in the design and application of robots to perform all sorts of industrial function. Now it is also developing robots to be 'caregivers' for the elderly and those requiring medical attention. As he continues in the following chapters, in this one he describes both the positive and negative results and potentials of his topic, in this case for the expanding reliance on robots. He notes, for instance, the pressure from a cost perspective of introducing robots into surgery applications when they cannot really substitute for human doctors. His examples and discussions range around the world as well - such as French classroom assistants and Korean jelly fish exterminators. Of course one of his main topics is the large current political issue about the impact of robots on human employment and unemployment. Not only driverless cars are coming on the highways, but robotic hairwashing machines are being installed in beauty salons.. Waiters and waitresses are being replaced in restaurants throughout the world. Ross devotes attention to the varied response of China to the introduction of robots.
His conclusion: "The assumption with robots is that they're all capex, no opex, but the capex you spend on robots doesn't get rid of the opex that people still require. We need to revise that assumption to account for the ongoing costs of keeping our people competitive in tomorrow's economy. We aren't as easy to upgrade as software." In other words society will somehow have to pay the price of displacement of human workers by robots.

Chapter 2 - The Future of the Human Machine - The issue of robots versus humans in employment leads next into the wider field of 'human machines' or 'machine learning'. The combination of computer power enabling the assembly of massive amounts of data and its power of applying algorithms to analyze and present actionable results of this data also replace humans. In this case not manual workers or waiters but 'white collar' workers and even managers and doctors. Ross discusses the growing ability to understand and potentially cure cancer as an example. The field of geonomics relies on analysis of massive data bases. Understanding the human brain through data analysis relates to many physical and mental issues.
Again, Ross points to negative as well as positive aspects. "There is a dark side to geonomics that even the scientists immersed in the field acknowledge. One of the primary concerns, and one of Luis Diaz's own worries, is that as geonomics grows more sophisticated, it will begin a process of creating designer babies." He discusses the genetic testing offered by such companies as "23andMe". There are many other issues and aspects about genetic information data as well. He writes: "There is a specific stripe of entrepreneur who views even the most cutting-edge geonomics research taking place in and around academic settings as too unimaginative."
Switching topics, Ross notes that while the U.S. has been the world leader in geonomics with many scientists from around the world flocking to work here, China is now advancing as a world leader in this as in many other fields. The funds being devoted to scientific research in the U. S. are declining while funds in China are increasing.
He integrates discussion of medical-health issues with other technological fields, for instance, smart phones. These are opening the world to millions of poor throughout Africa and Asia, enabling them to access greatly improved health, financial assets and many other aspects of standard of living.
His conclusion in this chapter is the subtitle of the last section: "Everything we know about the life sciences is going to change".

Chapter 3 - The Code-ification of Money, Markets and Trust - In this one Ross begins with a common misunderstanding. He equates the concept of money with currency based on his own observation as a child. But credit has always been a significant component of money and in fact predated the invention of currency attributed to the Lydians and Greeks. He writes: "Money has long been primarily a physical entity - something that can be held and weighed." Unfortunately he is right about its common understanding. But money is an abstract concept, not a physical entity at all. But he continues with a good description of the modern development of electronic money and increasing use of credit cards. But he jumps further ahead in his focus on what actually is new, 'digital currency'. The discussion turns to a meeting with Jack Dorsey, the founder of Twitter and Square. It is Square that interests Ross. This is an application developed or invented as a way to make everyday payments using a device that is growing even more precious than our wallets: our mobile phones." And Square is but one of a host of highly competitive companies seeking to lead in this industry. All this is to replace the expensive (for the merchants) use of credit cards. Even more revolutionary is the 'code-ification' as Ross terms it of the entire banking process for populations that have lacked not only credit cards and payment systems but access to banks themselves - such as in India and Africa. Ross, while working as adviser to the State Department, visited many of these places. He next brings up the related topic - trust. Transfers of payments for goods and services via electronic devices depends on trust - trust in the system itself and trust in the individual correspondent. Such huge companies as eBay and Alibaba pioneered in developing ways to generate trust. But trust expands in its role in many transactions. Ross cites Airbnb - the largest hotel system that does not own a single hotel. And he speculates on the types of delivery on demand that Uber will develop. From this Ross expands his view to the world level and the impact of the so-called 'sharing economy" on society, distribution of wealth, ownership, employment. He believes that this 'sharing economy' will include more types of labor. Whole work forces will be organized and sold on these shared platforms. Again, Ross notes both positive and negative potentials. he writes: "The opportunity to work on a project by project basis involves trade-offs." Among other problems, he notes: "Worker protections have shifted from employers to taxpayer-funded government programs."
Ross devotes a full section to the new phenomena of Bitcoin and Blockchain, what he terms a "coded currency" or a cryptocurrency. He describes the history of the development of Bitcoin since 2008. Again, its use rests on trust, but so does the use of government sponsored currencies in an era in which central banks regularly debase them. Bitcoin's measure of trust is effected by the level of trust of the Internet as a whole when we read so frequently of criminals 'hacking' into accounts. Ross explains all of this in detail. He cites incidents already in which thousands of bitcoins have been lost to hackers. The response of governments and economists has been mixed.
Ross believes there will be uses for blockchain technology. And the broader category, digital currency, is bound to expand. He writes in conclusion: "As block chain technology takes off, its impact will be like that of the sharing economy and other forces of digital disinermediation: it will force a rewrite of the compact between corporation, citizen, and government."
There is no discussion of the impact of his subject on the much larger component of money, namely credit itself, but only on a few specific examples in the context of 'trust'.

Chapter 4 - The Weaponization of Code - The chapter is about the use of computer networks to attack each other and defend against such attack. Cyber war as it is called has become a new, full category of warfare and governments around the world, as well as non-government actors, are devoting billions of dollars, Euros, Pounds, yen and Yuan to this conflict. He begins with a discussion of the "Shamoon" Cyber attack by Iran on Saudi Arabia's oil industry via destruction of its computer network. The chapter contains an excellent history of this warfare full of specific incidents and names of attackers and defenders. From the national security viewpoint this is the most important chapter in the book. The reader will have read about many of the events in the news, about China and Russia and Iran and even North Korea's extensive Cyber warfare.
From the investment and career view points it also provides much to consider. Ross writes: "The Bureau of Labor Statistics, hardly prone to hyperbole, reports that there will be 'a huge jump' in demand for people with information security skills." He states that the U. S. is very short handed in numbers of such experts. And he gives many specific numbers about the huge investments already being placed by companies large and small, well established and new start-ups, in Cyber security.
Ironically, he mentions specifically Kasperski, a leading (and Russian) provider of comprehensive virus protection and computer security for individuals. (I use it.) One has to hope (trust) that Kasperski, run by former KGB and military security experts, has not provided a 'back-door' into the applications it markets to the world.

Chapter 6 - Data: The Raw Material of the Information Age - We have read much already in the press about 'big data' and Ross in previous chapters notes the topic. Many books have been published about this. One important book is Pedro Domingos' The Master Algorithm: How the Quest for the ultimate Learning Machine will Remake our World. So in this chapter Ross discusses the basic forces behind all the topics of previous and subsequent chapters: that is the combination of the generation now of unbelievable quantities of raw data about everything taking place around us and the explosion in computer power to store, sort, examine and analyze this data to generate actionable decisions. In this chapter we read of the author's participation in the unprecedented use of data collection and analysis by the Obama election support team (in which he participated) that enabled them to target advertising , fund raising, and voter motivation. Similar campaigns are being waged by corporations and advertisers. And this is only about creation of data on current events. The entire history of the world and the corpus of all literature is also digitized as are billions of photographs. Along with the creation of 'big data' comes the essential 'big data analytics, or deep analytics" to make sense of it all. Ross writes: "Increases in data gathering and growth in computing power complement each other." Further, he comments: "The story of big data's real-world impact to this point has been largely about logistics and persuasion. ... But these fields are just the beginning, and by the time my kids enter the work force, 'big data' won't be a buzz phrase any longer.... It will change what we eat, how we speak, and where we draw the line between our public and private personas."
One specific application that Ross describes in detail is automatic language translation. He predicts that an individual will wear a ear piece that will transmit by real-sounding voice the translation of whatever language is being spoken by that individual's conferee, and in reverse, the individual's spoken word will be heard by those about him in their own languages. He comments: "Universal machine translation will accelerate globalization on a massive scale. But, as usual the author notes 'downsides' - of course this will eliminate jobs for many professional translators, but more non-intuitive it will create opportunities for fraud when person's voice can be mimiced perfectly.
Another major industry to benefit from 'big data' is agriculture. He writes: "The promise of precision agriculture is that it will gather and evaluate a wealth of real-time data on factors including weather, water and nitrogen levels, air quality, and disease - which are not just specific to each farm or acre but specific to each square inch of that farm land." He cites specifically Monsanto, DuPont and John Deere as leaders in this industry.
Yet another major industry to benefit is financials - -fintech The Financial Data System. Already, he notes, 2/3ds of the 7 billion shares traded daily in the exchanges is done by preprogrammed computer algorithms. He comments: "The next impact of big data in the finance world will be in retail banking, the area where average people are the customers, as opposed to investment banks or commercial banks." This topic over laps with the Bitcoin chapter. Ross has interviewed many leading entrepreneurs who are leading development of new methods to change the whole structure of banking, making it safer and more transparent. The core of a bank is simply its ledger system that records the assets and liabilities of its customers and of itself - in other words 'data'. Ross has interviewed both bankers and financial regulators. In a word, the current system is obsolete. He quotes one entrepreneur who claims that a large part of the financial disaster in 2008 stemmed from the banks themselves not even knowing the real value of the mortgages they held. Ross again cites Square as a leader in development of new, more efficient and safer procedures for creating loans.
Next comes Ross's discussion of Palantir (the all seeing stone) company that has been contracted by government to analyze data. This relates back to the topic of cybersecurity. The issue is national security versus private security or privacy. This topic gets into the essential need for individuals, beginning with children, to recognize that once digitized data is practically indelible. What young people are now adding to personal information on-line may come back many years later to adversely affect them. The danger comes not only or even mainly from hackers revealing personal information. An entire industry now gathers and sells such information. Ross writes: "Every few weeks, a new example arises that illustrates the problems accompanying the broader commercialization of our personal data". Governments have difficulty in creating effective privacy rights because the purveyors of data are international. Ross surrenders a great deal by stating that widespread loss of privacy will reveal everyone's scandals, resulting in greater public acceptance of behavior today considered scandalous. In other words, just learn to live with it, you are in a glass house.
He continues by writing: "Privacy is just the first in a series of concerns that big data will raise as it inserts itself more inseparably into our lives. " Another fear is that humans will become more like machines as machines become more like humans. Increasingly humans may rely more and more on machine algorithms to decide on mundane issues such as what to wear to match specific occasions and worse Another issue, correlations based on automatic analysis of big data also produces errors or results from built in biases in the data or programers.
Ross's conclusion: "The choices we make about how we manage data will be as important as the decisions about managing land during the agricultural age and managing industry during the industrial age.".

Chapter 7 - The Geography of Future Markets - Well geography is a wide ranging subject and so is this chapter. In this one the author evaluates and comments on current and future developments in many specific locations that he has visited, quoting as usual many specific leaders he has met. It is a long chapter as befits the extensive coverage Ross provides. And he apparently has been nearly everywhere except Australia and Antarctica. A basic issue he considers is Silicon Valley versus the world as the future venue for wealth generation. He opens with a quotation: "'We want to create our own Silicon Valley.' If there's a single sentence I've heard in every country I've been to, it's this one." He discusses the processes that made the small area around Stanford Univ and Cal. (a part of the San Francisco Bay area) and the potentials for many other areas (actually mostly cities) to compete for the future. The process itself is line the proverbial 'snowball'. Success breads success - wealth generates wealth - genius attracts genius. Ross uses the term 'domain expertise' to evaluate future potentials. Some 'domains' are content specific, like geonomics, robotics and Cyber. So localities that already have or soon will have gained the first-in-winner-take-all advantage will be difficult to supplant. But many other broad applications of data analysis can compete by application of this skill to other local types of expertise - such as automobiles in Detroit or health/medical around Boston. There will be opportunities for similar wealth-generating creations in such cities as London, Singapore, Beijing, Tel Aviv, New York and countries such as India, Estonia, New Zealand, South Korea, places in Africa and many others. In this context Ross describes the ancient role of cities as centers of culture and social development. He also includes the personal example of individuals such as Maria Umar in Pakistan, who created the Women's Digital League.
From this example Ross expands into a stress on the world-wide importance of increasing the role of women in all aspects of economy and society. Another general topic he discusses is the influence of the information era generally on political structure and the converse- that is open versus closed - government control. What he terms 'control freaks' governments that inhibit their own country's development by political oppression. He mentions specifically Putin who has shut down what was beginning to be the entrance of Russia into the future world. In this context he cites the contrasting examples of Estonia and Belarus. Ukraine and China provide examples of mixed responses with mixed results. He writes: "Estonia and Belarus are two poles on the open-closed axis. Most of the world lies between them, and many countries like Ukraine, are torn between the two." Further on he writes: "How states respond to this systemic loss of control and diffusion of power will greatly affect the character and performances of their economies." He devotes a section to focus on India and China for their significance, as he notes: The world's two most important rising economic powers, China and India, are both grappling wit the growing need for openness in their own ways.' More generally he considers the future in basic categories, writing: "Going forward, a crucial factor in countries' success will be their ability to empower their own citizens - and this means all of their citizens." And, "A second major condition necessary for societies to compete and succeed in the industries of the future is to have young people whose ideas are funded and whose place on organizational charts belies their youth." The reader may thing of the emphasis Forbes Magazine places on this issue with such major investigative essays as 'Forty under Forty' and lists of leading successful entrepreneurs under 30 years age.

Conclusion - The Most Important Job You Will Ever Have - In this chapter Ross switches emphasis but retains the same theme of the incredible change taking place in the world. He writes: 'The most important job I will ever have is being a dad, and I can't help wondering what all these coming changes - the ones that this book anticipates and the ones that it does not - will mean for our children's economic future." I have to expand that thought to include not only economic future but also social, cultural, moral futures as well. Ross, however, does focus mostly on economic aspects. He recommends that children develop 'multicultural' awareness. He recommends that they learn several languages, a mix of typical spoken languages such as Spanish and Mandrin, and technical languages used on programing. He writes that one of his favorite experts, Jack Dorsey, stresses programming language fluency "because it teaches you how to think in a very, very different way." Interestingly he cites many CEO's of leading computer companies who believe that a broad education in the classic liberal arts - learning how to think - and an interdisciplinary approach merging science and humanities is important. We read similar views in business oriented magazines.
Ross writes: "Today's youth who will enter tomorrow's work force will need to be more nimble and more familiar with the broader workings of the world to be able to find a niche that they can fit into." For current adults he writes: 'The growing economic diversity and increasing pace of change means that investors and people in global business will have to be as mobile and able to work across cultures as people newly entering the workforce."