3. BIG IDEAS 2019
4
Why Now?
Economic
Activity
Electricity
Automobile
Telephone
Steam Engine
Railways
Internet
Computers
Genome Sequencing
Robotics
Energy Storage
Artificial Intelligence
Forecasts are inherently limited and cannot be relied upon.
Source: ARK Investment Management LLC, 2018; Helpman, E. (2010). General Purpose Technologies and Economic Growth. Cambridge, MA: MIT Press; Brynjolfsson, E., & McAfee, A. (2018). The second machine age:
Work, progress, and prosperity in a time of brilliant technologies. Vancouver, B.C.: Langara College; Kurzweil, R. (2016). The singularity is near: When humans transcend biology. London: Duckworth.
According to ARK’s research, the global economy is undergoing the largest technological transformation in history.
Estimated Impact of Innovation Platforms on Economic Activity*
Blockchain Technology
1780 1800 1820 1840 1860 1880 1900 1920 1940 1960 1980 2000 2020
*ARK created this chart based on the relative impact of an innovation scaled by the degree of consensus between economic historians that a particular innovation should be
considered an innovation platform. The underlying data assumes that all innovation platforms follow a characteristic investment and realization cycle of similar duration.
2 IR
1 IR 3 IR
4 IR
4. BIG IDEAS 2019
3
Identifying Investable Innovation Platforms
ARK’s investment process recognizes that true disruptive innovation causes rapid cost declines and demand growth, cuts across sectors
and geographies, and spawns further innovation, stimulating growth over extended time horizons.
1. Cost Curve
Declines
2. Cross Sector
Ramifications
[1] Jovanovic, Boyan & Rousseau, Peter L., 2005. "General Purpose Technologies," Chapter 18.
Subsectors include: Printing, Fabricated Metal, Transport Equipment, Stone Clay Glass, Primary Metals, Petrol/Coal, Paper, Electric Machinery, Rubber, Leather, Chemicals, Textiles, and Food.
0%
20%
40%
60%
80%
100%
1880 1960
Penetration of Electricity by
Manufacturing Subsector1
Percent
Change
in
Costs
Cost declines compound
as
production
growth
accelerates
.
1900 1920 1940
Within 30 years,
electricity penetrated
most sectors
3. More Innovation
New Innovation and Technologies
Thanks to Battery Breakthroughs
Cost Decline Under Wright’s Law
(Including Tipping Point)
0%
-
2%
- 4%
Cost curve bends as unit
- 6%
demand crosses critical
thresholds
.
-
8%
-
10%
-
12%
- 14%
-
16%
5. ARK’s Big Ideas 2020
1. Deep Learning — From Vision to Language
2. Streaming Media — The Primary Technology Behind Content Distribution
3. Electric Vehicles — Faster Adoption Than Most Think
4. Automation — Increased Productivity and More Jobs
5. 3D Printing — An Underestimated Technology
6. Autonomous Ridehailing — The Future of Transportation
7. Aerial Drones — A Cost Saver and Potential Life Saver
8. Next Generation DNA Sequencing — The Transformation of Oncology
9. Biotech R&D Efficiency — The Convergence of Technologies in
Healthcare
10. Digital Wallets — The Transformation of Banking
11. Bitcoin — An Evolution of Monetary Systems
BIG
IDEAS
2020
3
6. The exponential five - Tony Saldnha
1. Artificial intelligence
2. Smart process automation
3. Blockchain
4. Robotics and drones
5. Special-function technologies (virtual reality, 3D printing,
Internet of Things, nanotech, energy storage, biotechnology,
advanced materials, etc.)
Saldanha, Tony. Why Digital Transformations Fail . Berrett-Koehler Publishers. Kindle Edition.
6
8. 8
● Unprecedented speed of the collapse of markets in March.
● An unprecedented global pandemic with extraordinary
economic and social impact.
● An unprecedented resources deployed to find a medical
solution.
● An unprecedented response from governments around the
world to stimulate the economy.
● And an unprecedented recovery in markets through April and
May.
13. BIG IDEAS 2019
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Deep Learning Is Software That Writes Itself
TRADITIONAL SOFTWARE
Traditional software is coded by an army of human
programmers. It’s expensive, fragile, and difficult to maintain.
Programs work as designed but cannot surpass human
performance.
DEEP LEARNING
Deep learning is software that’s not ‘written’ but ‘trained’.
Humans gather data and create a learning framework. The
system learns the right behaviors automatically. Deep learning
improves with more data and often exceeds human
performance.
Learning Program
17. www.digitalfutures.co.za
EXO - Massive Transformative Purpose
17 Ismail, Salim. Exponential Organizations: Why new organizations are ten times better,
faster, and cheaper than yours (and what to do about it)
Crafting an MTP can be challenging. In the early
stages of forming your MTP, try separating the
intent— what you want to achieve— from the
actual wording. It is easy to get sidetracked by
the phrasing when you're still in the phase of
pinpointing the actual purpose.
● Why does the organisation exist?
● What is the purpose of the organisation?
● What is the target of the organisation?
● Do kids and grandma’s understand it?
24. www.digitalfutures.co.za
ExO Attribute - Staff on Demand
24 Ismail, Salim. Exponential Organizations: Why new organizations are ten times better,
faster, and cheaper than yours (and what to do about it)
Leverage external workers rather than
"owning" employees in order to
increase speed, functionality, and
flexibility while decreasing fixed costs.
● Can we build a cloud of external
employees?
● How could we have the best
employees for each activity?
● How should we find and hire, using and
agency, direct, local, remore, platform?
25. www.digitalfutures.co.za
ExO Attribute - Community & Crowd
25 Ismail, Salim. Exponential Organizations: Why new organizations are ten times better,
faster, and cheaper than yours (and what to do about it)
Attract, engage, and leverage a community
whose like-mindedness inspires support,
adding creativity, innovation, validation, and
even funding.
● Is there and existing community we can
leverage?
● How will we turn external community into
advocates?
● How will we create value for the community?
● How can the community create value for our
product?
26. www.digitalfutures.co.za
ExO Attribute - Algorithms
26 Ismail, Salim. Exponential Organizations: Why new organizations are ten times better,
faster, and cheaper than yours (and what to do about it)
Leverage automated functions, including
machine learning and deep learning, to get new
insights about customers, products, and
processes.
● Why are we developing algorithms?
● Which labor/activity/task can we automate?
● Which algorithm/systems/platforms are you
going to use to process/leverage the informatio
you have?
27. www.digitalfutures.co.za
ExO Attribute - Leveraged Assets
27 Ismail, Salim. Exponential Organizations: Why new organizations are ten times better,
faster, and cheaper than yours (and what to do about it)
Access, rent, share, or otherwise outsource
assets to stay nimble and reduce capital
expenditures.
● What fixed costs can we move off the balance
sheet by renting them?
● What processes can we outsource?
● Is there spare capacity lying around which we
could re-purpose?
28. www.digitalfutures.co.za
ExO Attribute - Engagement
28 Ismail, Salim. Exponential Organizations: Why new organizations are ten times better,
faster, and cheaper than yours (and what to do about it)
Leverage outside interest through
gamification, digital reputation systems, and
incentive prizes to create network effects
and positive feedback loops.
● What contests/promotions can be created to
increase customer acquisition?
● How can we leverage gamification to
improve our products and services?
● How can you make people use your product
every day?
30. www.digitalfutures.co.za
ExO Attribute - Interfaces
30 Ismail, Salim. Exponential Organizations: Why new organizations are ten times better,
faster, and cheaper than yours (and what to do about it)
Customized filtering and matching to
process the output of external attributes
(SCALE) into the internal organization.
● Can we build an API to connect our systems
with our community?
● Can we create a marketplace to drive
growth?
● What can we do to provide my
product/service in a self-service mode?
31. www.digitalfutures.co.za
ExO Attribute - Dashboards
31 Ismail, Salim. Exponential Organizations: Why new organizations are ten times better,
faster, and cheaper than yours (and what to do about it)
Make real-time information with essential
company and employee metrics accessible
to everyone internally with short feedback
loops.
● Why do you need real-time data?
● What real-time data do you need to
track/measure?
● What systems will you use in order to
measure that data?
● What will you do with this data?
32. www.digitalfutures.co.za
ExO Attribute - Experiments
32 Ismail, Salim. Exponential Organizations: Why new organizations are ten times better,
faster, and cheaper than yours (and what to do about it)
One of the key principles of Lean Startup is
to make data-driven decisions, which means
data needs to be gathered about the
experiment, regardless of whether it's an
interview, an MVP, or another kind of
experiment.
● What do you want to learn and what
experiments will you run to do it?
● How will you measure the success of the
experiments?
● How can we encourage experimentation
within the organisation?
33. www.digitalfutures.co.za
ExO Attribute - Autonomy
33 Ismail, Salim. Exponential Organizations: Why new organizations are ten times better,
faster, and cheaper than yours (and what to do about it)
Flat structure allowing individual employees
and/or self-organizing, multidisciplinary
teams to operate effectively.
● How can we reduce decision-delay or
approval chains?
● How can we avoid too much management
and allow staff to grow?
● Is there a framework/tools we could use
(OKR, Holacracy, etc.)
34. www.digitalfutures.co.za
ExO Attribute - Social
34 Ismail, Salim. Exponential Organizations: Why new organizations are ten times better,
faster, and cheaper than yours (and what to do about it)
Leverage collaborative tools to have real-time
conversations with transparency and
connection across the organization.
● How will we leverage social technologies to
improve communication (within our
team/community/clients)?
● What social network tools can we use?
● Can we use social tools to do some of the
work for us?
35. www.digitalfutures.co.za
Introduction to the ExO Sprint
35 Ismail, Salim. Exponential Organizations: Why new organizations are ten times better,
faster, and cheaper than yours (and what to do about it)