Business 5.0 is coming: The convergence of AI, IoT, blockchain, APIs, smart contracts and hybrid computing

Convergence of a plethora of new technologies will be key to the 'programmatic enterprise' of the future, says McKinsey and IBM advisor John Straw

Business 4.0 is old news - the future is Business 5.0, which will be all about the convergence of artificial intelligence, Internet of Things technologies, blockchain, APIs, smart contracts and hybrid computing.

That's according to John Straw, an advisor to both McKinsey and IBM, speaking at Computing's recent Cloud and Infrastructure Live event in London.

"Think about an environment where all of these things converge; where they come together as one single item.

"Silicon Valley's view of all that is ‘the automatic business'," said Straw.

"Many McKinsey clients are starting to build AI into their ‘public face'. CEOs haven't stopped talking about big data, but they're now also talking about artificial intelligence, and building this into the way that they think," he added.

Prime emerging examples of Business 5.0, suggested Straw, are a General Motors start-up DAO - decentralised autonomous organisation - offering a peer-to-peer car-sharing service and Amazon's ‘automatic supermarket' retail store experiments, which relies on image recognition to identify shoppers and automatically bill them.

McKinsey clients are starting to build AI into their ‘public face'

McDonalds, meanwhile, has acquired an artificial intelligence start-up and intends, eventually, to take orders via voice recognition, and to employ robots to flip burgers.

Netflix, meanwhile, is analysing subscriber data in order to hone its shows.

"Netflix is starting to get it… what they are doing is using AI to edit out ‘boring'," said Straw. "They know when you pause, when you stop, when you rewind. They know the device that you're watching it on. They know the time of day, they know where you are in the world. They have about 100 different data points.

"The executive [I was talking to] said to me, ‘let's take the third episode of series one of The Crown. I've got 30,000 to 50,000 people in minute 13 that stopped watching it. Three minutes later, 11,000 people fast-forwarded through a particular section. What did we find out? We found out that those parts were boring'.

"So, they're capable, at a very high level, to see what ‘boring' looks like," said Straw, adding that Netflix was therefore honing the writing of its shows accordingly.

Going bananas

While robots have been developed that are capable of building Ikea flat-pack furniture from scratch, or making sausage dogs from balloons, it is IoT sensors that has seen some of the biggest developments in recent years, believes Straw, particularly the all-important sensor technology.

https://www.youtube.com/embed/O0nmyluOH90

"First, we've got a biodegradable sensor that offers in-body monitoring and diagnosis. In other words, human beings will become the node or a node in an IoT network. We've also got battery-free sensor technology that actually gathers energy from radio waves. And these things are dropping in price dramatically," said Straw.

Lower prices mean that virtually anything could have a sensor attached to it, including low-cost, low-value items.

"Every day in the UK, we throw away 1.4 million bananas. Because the inefficiencies in the supply chain are so great, we shipped the wrong amount of bananas to the wrong place at the wrong time, at the wrong price.

The benefits include the ability to strike transactions within minutes and to execute automatic remittances

"But imagine if a banana has got a biodegradable sensor in it.

"It's actually working out how many bananas you're actually eating, that talks to your internet-enabled fridge and the fridge works out how many bananas your family is consuming over a period of time, automatically placing an order via an API to your online supermarket, which then actually places the order into the supply chain.

"All of a sudden, we are end-to-end connected from the point where you're actually eating the bananas all the way back to the banana producers. That means that we can ship the right amount of bananas to the right place at the right time, and at the right cost, building-in massive efficiency. This, in many respects, is the ultimate form of Business 5.0."

This ultimately leads to what Straw - and IBM - calls "the programmatic enterprise".

"Think about the AI system being the ‘enterprise DJ'… because everything in the organisation is connected across IoT, then that means that the AI system has got control over everything in the organisation, literally the ability to dial up or dial down profits according to what they want, what they want to be able to do," said Straw.

The fundamental basis of Business 5.0

Then, of course, there is blockchain. But it isn't cryptocurrencies that Straw has in mind, but the ability to generate so-called ‘smart contracts', which could have all kinds of implications for financial services and supply-chain management.

"IBM founded a consortium to build a system called ‘Trust your Suppliers', intended for supply chains. It is a major supplier information management system," he said, adding that it was based on an Ethereum blockchain platform. "It has got a level of momentum [already] and it's there a lot earlier than I thought it would be.

"That leads me to smart contracts. I believe that this is the fundamental basis of Business 5.0."

Fundamentally, continued Straw, the benefits include the ability to strike transactions within minutes and to execute automatic remittances. Furthermore, it slashes costs, including the removal of lawyers from many transactions.

"That I think is the foundation of Business 5.0, together with the API. I won't dwell too much on APIs. But… this is what I have talked to CEOs about, which really gets their attention. This is one of the best examples of an API that I've seen.

"This was Uber. I found it last year by accident. I was booking a hotel on the Hilton app and I noticed there was a new button there on the Uber button. So I pressed it.

"So, using an API, it looked at my diary, and it worked out where I was before I was due to check-in to the hotel, and then it said, ‘Would you like to book me?'

"So I click the button, and it reserved for me a ride. And then it said, well, tomorrow morning after you have stayed in the hotel, this is your next appointment. Do you want me to book you another ride there?

"So what I have done is, and this is critical, it had removed friction from a customer journey by using this API integration as a really great example. CEOs really get that."

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