Tech Convergence: Spot it. Anticipate it.

This edition is part of a series unpacking "Convergence Literacy" which is something I refer to as

the competence or knowledge in relation to how events, technologies, macro trends converge together.

As the world gets more complex, we will need more thinking models and ways to make sense of all the convergences. This series offers several thinking models in a stacked format. You can read the previous edition here.

This part of the series focuses on the following three kinds of convergences:

1. Technology Convergence
2. Technology Convergence combined with Infrastructure Convergence
3. Compounded Technology Convergence

Technology Convergence: An Agricultural Symphony

Every industry has been transformed with the convergence of technologies creating new value chains. One illustrative example of what this technology convergence looks like is agriculture. It humbly started with humans and plow animals, then mechanized tractors, followed by mass production automation with computers. Today it is being supercharged with the convergence of multiple technological convergences, namely those identified in the following graphic:

These technologies uniquely combine and converge to create increased productivity and value chains. Here is a break down of what the agricultural symphony of technology convergence looks like:

·       Cloud computing: The computer powerhouse of where all aspects of the agricultural value chain connect.

·       Robotics: Whether it is autonomous tractors, produce pickers, drones, or roboticized fertilizer systems, advances in robotics have augmented the labor power of the individual farmer.

·       Space Tech: Space based imaging help monitor crops, anticipate problem areas and crop yields; as well as custom irrigation and fertilizer recommendations. Global Navigation Satellite Systems (GNSS) help with precision monitoring of crops and livestock and assist autonomous devices to find their way around the farm. By processing information across the electromagnetic spectrum, hyperspectral imaging from space can target crop nutrient deficiencies and is a key part of precision agriculture.

·       Internet of Things: From tractors, to drones, to sensors, all hardware can be internet enabled transforming the ability to remotely track, monitor and direct it.

·       Big Data: Any and all forms of sensors and devices generate data which can be captured to better understand unique aspects of agricultural production.

·       Artificial Intelligence: Processing big data to understand the growth of the crops in ways never possible before by converging data from weather stations, sensors in the ground, pictures, geographical position of crops, type of seed, irrigation, fertilizer used and many more data points across time. This insight from data allows farmers to identify problems quicker and address them sooner, it also allows them to pivot and adapt to changing climactic conditions.

·       Machine Vision: Whether it is images from produce picking robots, aerial drone footage or satellite images, machine vision capabilities autonomously help identify nuanced patterns in the data that humans will not be able to spot.

Many of these technologies also converge in other industries to generate productivity and efficiencies not possible before. However, it is not just technologies that converge alone. To understand where we are today, what is possible, and anticipate what could be possible, it is important to also understand how infrastructure converges with technological convergence.

Technology Convergence Meets Infrastructure Convergence

Part of anticipating how technologies converge to create new value chains and disrupt markets is understanding what infrastructures they will build on. These infrastructures need to be relatively mature to be able to build on top of. Otherwise the new business value proposition will fall like a house of cards if the infrastructure underneath it is not stable.

An example of infrastructure convergence is the platform that the combination of the following infrastructures has created:

Over the past two hundred years the United States Postal Service grew its infrastructure and has been able to reach each home in the entire country. (Fun pictures of USPS history and technologies). The technology convergences that made the credit card possible were magnetic storage, electronic verification systems and point of sale terminals. However, it took time for Visa and Mastercard to build the network and for credit cards to be socially adopted both by businesses and consumers.  The possibility of transmitting data electromagnetically was a materials science advancement of electrically conductive materials in cables which is what allowed for the extensive landline telephone network across the country, which later allowed for the dial up internet. The dial up modem internet however could not reach critical mass without personal computers. Personal computers were a combination of several technological advancements namely the microprocessor and the cathode ray tube for the display. However, it was the reduction in cost for the parts of computers which helped bring personal computers into the homes of a critical mass of the American population.

The result of this technological advancement was four key infrastructures:

1.      A nationwide postal service

2.      A wide spread electronic payment system

3.      Dial up internet capacity

4.      Computing interface to access the internet

It is on these four infrastructures that the online marketplace Amazon was created in the 1990s. In his Blue Origin For the Benefit of Earth presentation Jeff Bezos explains that Amazon could have never existed had it had to build each one of these infrastructures which was trillions of dollars’ worth. He used this convergence of infrastructures to disrupt the bookstore business model and eventually all forms of brick-and-mortar sales models.

Sometimes disruption doesn’t come from one technology, but from a way of taking the many different technologies and infrastructures today and building a new way of doing something on top of them. As new technologies converge with existing and emerging infrastructure, new possibilities emerge.

Compounded Technology Convergence

We have seen an example of how technologies can converge together to create new value and efficiencies in agriculture, and we have seen how technology convergence and infrastructure convergence is what gave Jeff Bezos the opportunity to build an innovative and disruptive digital marketplace on top of them. However, there is also another form of technology convergence that is important to recognize – one that is compounded.

The following graphic attempts to capture three orders of compounded convergence with the example of Tesla's electric vehicles.

In the case of Tesla’s electric vehicles, there are several compounded convergences, notably: technology, network and data.

·       Compounded Technology: While the engineering innovations and advancements in all the components of Tesla vehicles was a historical achievement in the history of electric vehicles, the greatest value of technological convergence is not the car itself. Today there are countless other electric vehicle car manufacturers that make electric vehicles with competitive prices. Namely in China where SUV electric vehicles with over 600km range (on one charge) retail for $18,000, and even cheaper and smaller electric vehicles for $5,000. (video of Chinese models). What all the newer, cheaper and competitive electric vehicles don’t have that Tesla has, is the compounded effect of the various hardware and digital convergences in the original set up to be a data first company before anyone realized.  

·       Compounded Network: Because Tesla was first to market at a critical mass scale (and with its set up as a data first company), it was able to rapidly accelerate its autonomy growth. Each Tesla in the world has been set up to gather data from each car and upload it back to the Tesla “brain” so to speak. Data from the global Tesla car network is then churned and a new more advanced algorithm becomes instantly available to every Tesla car in the world in the next update. This network learning is exponentially compounded which gives Tesla a unique advantage compared to other electric vehicle manufacturers.

·       Compounded Data: While other electric vehicle manufacturers can attempt to copy Tesla’s data first car model, it is currently challenging to compete as Tesla has market share (see image below). However, this may not be for long as other companies, particularly China’s BYD take the lead. These compounded convergences create a new opportunity for Tesla to get in to the Software as a Service (SaaS) business model. One where Tesla car owners could let their car be a “robo-taxi” and autonomously go out and make money. This vision is predicated on Full Self-Driving (FSD) being up to regulatory standards for autonomous ride sharing and social acceptance for getting into driverless Teslas as the new Uber. Elon Musk is working towards this robo-taxi SaaS model; as well as a vehicle manufacturer agnostic SaaS model where the Tesla algorithm would be licensed for use in other car brands. This would be akin to the Android mobile operating system being phone manufacturer agnostic. While it currently has the advantage, it is still unclear if Tesla will get to market first with driverless full self-driving autonomy. What is clear, is the compounded convergence that enabled this as a possibility. This possibility exists for Tesla just as it does for any other car manufacturer with the same ambition to turn low margin car manufacturing into a high margin SaaS model.

Systems Thinking is for Everyone

These were some ways to understand technology convergences leveraging key concepts from systems thinking. In a world where artificial intelligence answers all our questions, we need to develop thinking models that help us not just ask the right questions, but contextualize the information in a meaningful way. Systems thinking is an important framework for appreciating connections and inter-relationships between systems. Key concepts in systems thinking are: interconnectedness, synthesis, emergence, feedback loops, causality, and systems mapping.

While systems thinking is very helpful from an analytical and mindset perspective, it is also important to have tools to understand the the era of exponential technology growth. The next editions of the Abundant Minded Tech Strategy newsletter will continue to unpack the “Convergence Literacy” series offering concrete ways to layer thinking and tools to process current changes. The next edition will explain contemporary exponentiality, followed by the mash up of macro trends that convergence across industry and technology lines, concluding with perspectives on how to find relevant and aligned signals in the noise for opportunities and risks.

If you are strategically looking to hedge your organization’s future during these rapidly changing times, here are three ways I can help you:

1. Consulting: reach out to explore the strategic advisory services I offer focusing on convergence for business growth opportunity areas, competitiveness, moat protection and emerging technologies. Check out my Linkedin profile for the over hundred countless glowing reviews about my advisory work.
2. Board Advisor: if you are looking to diversify your board's thought leadership with complex systems thinking, convergence viewpoints, emerging technologies, a world view and a team player contact me.
3. Speaking & Workshops: if you’d like more of these kinds of technology convergence thoughts, my global speaking engagements on emerging technologies, the 4th industrial revolution, artificial intelligence and the importance of imagination in an era of AI have been well received with comments like "I wish I met Lydia sooner" and "I deeply admire her intelligence and humanity, and of her ability to challenge and explore how to make any enterprise more impactful and successful toward the greater good.” I also offer quarterly technology convergence awareness and exposure talks. Reach out to book me for a talk.

My forthcoming book is about the importance of imagination in business success and competitiveness called "Imagination Dilemma: Tools to overcome it and thrive through disruption." The main argument is that when technology can do everything for you, what is left is imagination - and that is the competitive advantage. You can sign up for updates here.