Intelligence becomes key

Professor Peter Chochrane OBE – formerly chief technologist and head of research for BT and now co-founder of new technology accelerator firm ConceptLabs with a group from Apple in San Diego – is a future-gazer with a difference. He understands what he’s talking about: this is a man with six times as many doctorates as O levels, who led an R&D staff of 660 and was charged with forecasting technology. His starting point is that computing and telecommunications are colliding – and that means a panoply of possibilities coming at us with startling speed. He points to the evolution of manufacturing through the ages – from cottage industry, to the industrial revolution, to today. “And now we’re hitting the communications and information explosion,” he says. “The Internet provides for one-to-one, many-to-many, one-to-many and many-to-one connections. Communications just got broader, faster, deeper than ever: and you can do them from anywhere, fixed or mobile. So it’s real global markets, and in manufacturing there will be consolidation. We’ll get rid of hundreds of manufacturers,” he predicts. He cites the automotive and aircraft industries as harbingers of the change, with OEMs now less manufacturers and more assemblers of parts made by others. “In America in 1900 there were hundreds of auto makers: by 1920 there were just four.” The same is true of chip makers and it will happen everywhere: mass production of what are becoming increasingly commodity items. “So it’s clear,” he says, “that if you’re a component manufacturer you need to be looking around. You can’t afford to be supplying just one company. And you need to be constantly aware of change that might impact your market.” Like new technologies and what your competitors are doing. But you need to wise up fast, he insists, because this is happening faster and less predictably than most realise. “It took 100 years to install 28 million phone lines, but just 11 to roll out 30 million mobile phones. The time it takes to grow to a $100m industry is collapsing: it took PCs 10 years; the Internet did it in four.” And then there’s records: “when vinyl went over to CDs there was 10 times less plastic, but the price went up by a factor of three: MP3 is payback time!” And with developments around bandwidth and transmission rates, the world is becoming a metaphorically smaller place: “It’s less about moving matter around today: more about shifting bits. It used to be telecoms versus computing; now it’s BT versus BA,” he quips. “This will destroy many traditional companies – and you can die real fast if you don’t see [change] coming.” “The thing is IT isn’t going to slow down. Everything is becoming increasingly automation, IT and communications intensive. Think of factory floor production and logistics – managing piece parts, with paper ‘travellers’. We have barcodes now, but when we embed transponders, we’ll be able to store much more information about the part, we’ll know where to find it, what steel was used, what processes, which machines, what batch. We’ll have an automatic audit trail – an electronic record. “And,” he adds, “we’ll have a travel itinerary for the device! What’s more you’ll be able to find it (in transit and in use) by metaphorically shouting for it – electronically.” And he rails against the estimated just 15% of truck space that’s used around the UK. “If boxes knew where trucks were and where they were going, and vice versa, you could cut out 70% of truck journeys,” he says. “And the neugents can do this very, very fast.” We have to learn to live with this, he says, and understand that it’s all coming chaotically. “Think about yo-yos: not long ago, in one week there was a world famine of yo-yos just because kids decided they were cool: they talked, phoned, emailed.” Demand was suddenly and unpredictably exponential. And the same has happened with other desirables: “think of the VW Beetle”. Cochrane’s point: “communications, and our herd instinct, mean that fads and fashions can come and go very quickly.” Interestingly, the same applies to networks. “Think of 2,000 people at a conference; when there’s a coffee break, 300 get on their mobiles – and the network collapses. And it’s the same with pop concerts, exhibitions, road accidents.” Telecomms networks, purchasing, retail and manufacturing: “they’re all getting very peaky. What was linear and well behaved, has become highly causal, focused and chaotic.” The lesson is that forecasting becomes ever more difficult: so the game moves to becoming more responsive and agile. And again that involves turning to technology – to the web specifically, and synchronised supply networks – to strip out time and wasteful procedures. But there’s more: “There are huge opportunities being missed,” says Cochrane. “Our existing industries are very backwards in using new tools … I would like more organisations that have information about me to use it – but the don’t. Like banks: they know my income, they know how many children I have, but they don’t send me a personalised financial offer that will look after my kids through university. And it’s the same with car companies. I just get sent standard crap that goes straight in the bin.” He’s describing CRM (customer relationship management). But it doesn’t stop there: in Cochrane’s world, it’s also about embedding intelligence into systems and products. “How many manufacturers understand what customers do with their products? We put all this complex functionality into our washing machines, microwaves, video recorders, but who uses what? Put intelligence in and you can find out.” Neat. “Then you can turn the value set upside down, and say to customers ‘we have made this product just for you’.”