Earlier this month, the Bureau of Labor Statistics forecasted the 2 of the top 3 biggest growth areas of labor in the U.S. to be tech-driven: a whopping 1.5 million jobs over the next 10 years (coverage from the Huffington Post). Yet the vast majority of Fortune 100 CEOs are still technology slackers (as measured by participation in social media. Hardly a perfect measure, but it's scary).
Modern tech-driven innovation will be led by a new kind of business leader who has a keen sense of technology, and barriers between C-Level executives and IT must fall. Two industries already illustrate the trend that will prevail in all industries over the next 50 years: capital markets and baseball.
Yup, that's right, let's start with baseball. In the past 20 years, the organizational principles of baseball have changed from gut feel and folklore to robust statistical analysis of every single element of the game (then applying gut feel). Bill James began his statistical analysis of what made teams win in 1977, and it was brought to the popular consciousness by the best seller Moneyball in 2003. The Boston Red Sox and their fabled 86-year losing streak was not just broken after they adopted a quantitative approach to baseball, they became the most successful team of the decade. And its no accident that the main owner of the Red Sox is financial guru John Henry, which leads us to the other exemplar for future business: financial services.
Financial services is already 20 years into this transition. In the past 10 years, mathematical, real-time trading has risen from less than 5% to over 70% of trading activity on U.S. stocks alone, and the rest of the industry is becoming electronic. 20 years ago, in my first job out of college, I worked on a trading floor. The traders were MBAs from Harvard and Stanford - brilliant, personable, and competitive. The ultimate knowledge workers. Now, the top traders are mathematicians. They are competitive but in a more cerebral way. 20 years ago, trading floors were loud and boisterous - traders shouted down phones, and at each other; now, they are intense mission control centers. Shouting has been replaced by the clicking of keys on keyboards. Analytical acumen is now just as important as intense physical passion.
Over the next 50 years, other industries will evolve in much the same way: the winners of the modern economy will adopt quantitative strategies as much as traditional business strategies.
Event processing facilitates quantitative thinking with its modern, visual development tools. These tools help facilitate analytical thinking, and also lower the barrier between business concept and implementation (see the related prediction that cognitive physics will be as important as computing physics)
For example, a trading strategist can describe a strategy like: “If the price of IBM goes up more than 2% in any 10 minute time window, but HP doesn’t, then buy HP, but only if the spread holds.” These words, this strategy, this business logic, can be expressed directly with visual tools by business analysts and IT. And the modern business leader will need to communicate fluently in this language - they won't have to code it, but they'll have to understand the math of their business deeply, and in detail.
By lowering the barrier to express quantitative business strategies, innovation cycles accelerate.
But with only 2 of the Fortune 100 CEOs on Twitter, the opportunity to out-think your competition is wide open. So the winners of tomorrow will be led by those who get comfortable with technology today.
...to be continued...
