In July of this year, an array of Blockchain-based Metaverse and Web3 platforms launched the Open Metaverse Alliance, a new decentralized autonomous organization to ensure a governance system within the Metaverse with four core principles of transparency, inclusiveness, decentralization and democratization. In this Sponsor Spotlight at the Bloomberg 2022 Tech Summit, Accenture’s Chief Executive for Technology and the Chief Technology Officer and co-author of the new book Radically Human, Paul Daugherty, spoke to Bloomberg’s Mark Miller about the next wave of digital transformation, which he predicts will result in greater change in business over the next decade than what we saw in the prior decade. Importantly for VX readers, Daugherty highlights five forces that are driving predicted change: 1) AI and Cloud technology will transform every part of every business; 2) an ongoing war or competition for talent; 3) Sustainability- the need to find better green solutions in how we do technology; 4) the growing importance of thinking in the long term about the Metaverse’s potential; and lastly, how the ongoing revolution of digital technology will transform science, space exploration and more.
Mark Miller: Thank you all for being with us today. Paul, you are the group’s Chief Executive for Technology and the Chief Technology Officer for Accenture. Before we talk about the Metaverse, which I have many questions about, the theme of our event is looking forward. I'm curious to hear your thoughts on what kind of broader trends will shape businesses going forward.
Paul Daugherty: First of all, thanks for having me here. It's great to see a crowd like this come together again for events and sharing ideas.
When I think about the future, I think about it from a few perspectives. I wrote a book about what we believe is going to happen in the future. We'll talk about that in a little bit, but I also run a part of Accenture's business that's an over $30 billion part of our business. Seeing and predicting where things are going is important to running our business right.
When we look at the future and directing our business, I think it's important to step back and understand that we're in the middle of a massive technology revolution. We get caught up in the day to day of exactly what's happening right now, but we're 70 years into the information technology and digital revolution. We're hitting a really interesting pivot and part of it right now. I think the next decade will be bigger in change to the prior two or three decades. Three decades ago, we didn't have an internet; Two decades ago, we didn't really have mobile phones. That's the potential of the next decade of what's to come.
There are five forces we talk about. One is total reinvention of the enterprise because as much as has happened, only 12 percent of businesses are using the potential of the Cloud. Only 13 percent are using artificial intelligence to its potential. There's a lot more potential for reinventing business and organizations.
The second is around talent because this decade is going to see an ongoing war or competition for talent, unlike what we've ever seen before. Your ability to create talent and create learning platforms to have the best people will separate winners from losers.
The third is around sustainability. It's important for tech because in the last 15 years, emissions resulting from technology have gone from one and a half to four percent of global emissions. It's forecasted in the next 15 years to go up to 14 percent, which is catastrophic if we don't find better green solutions in how we do technology.
The fourth thing that will really define the decade is the Metaverse, which we might dive into a little bit more.
Then, the fifth is the ongoing revolution of how the digital technology that we do, like cloud data and AI, will transform science, outer space, and other things in ways that will be really transformative over the decades.
Mark Miller: Let's talk about one of those. Everyone talks about the Metaverse. I'm not sure how many people understand the Metaverse; I don't count myself as one of them. What does it actually mean for business and the future of business?
Paul Daugherty: I think the Metaverse really will be the greatest transformation of business in the next wave of digital transformation, and it will be a greater change in business over the next decade than what we saw in the prior decade. Think about everything we've done in the prior decade by comparison.
The way I think about the Metaverse is it's the combination of real and virtual identity products and places. It’s not just about the virtual. It’s about how you can combine the real and the virtual. That’s why we talk about the Metaverse being a continuum of experiences. It's also not just about the headsets; it's about 2D experiences through your phone and devices.
I think it's really profound in terms of the shift its going to have for two reasons. One of which is it's not just about the consumer stuff we talk about, although that's important. That's the tip of the iceberg that's visible. A lot of the disruption is what's beneath the surface, with things like digital twins in manufacturing, augmented workers, maintaining plant equipment on the other side of the planet, and things like that.
There are two new capabilities coming online. We can debate the whole day about Web 3 and what our perspectives are on Web 3. Set aside the governance and some of those aspects, the technology coming through Web 3 about open, persistent, shared, collaborative spaces for any kind of internet of place and then tokenization and digital identity through distributed ledger, creating tokenize a lot of the economy, does drive a big transformation.
We believe the Metaverse will transform every part of every business. Reality for us is our Accenture Metaverse. We think it's the largest enterprise Metaverse that's out there. We'll onboard 150,000 people, and we're growing lots. We're hiring a lot of people. We’ll onboard 150,000 people in the Metaverse with the learning and retention being demonstrably better, the neuroscience and how we've constructed being demonstrably better, and the connections that people are forming across the company globally being demonstrably better than before we had that capability.
Mark Miller: Next year, when Accenture comes back as a sponsor, will we do it in the Metaverse?
Paul Daugherty: We could. We are doing hundreds of client meetings in the Metaverse. For example, we have 3D scanned a lot of our offices and most of our research labs. We had a meeting of CEOs recently at our research lab that focuses on the energy industry via the Metaverse. We had our Board of Directors there recently.
The thing you have to remember is it's a continuum. The Metaverse will be used to enhance the real world experience and enhance human connections, which is what we write about in the books. This isn't about replacing us and being in read Ready Player One. It's about how can we use these new experiences to do new things. That tokenization of the economy and tokenization of products is very transformative, and we're seeing that start in many industries.
Mark Miller: I think that's a good place to talk about some of the concerns that leaders have around security, fraud, safety, and sustainability. How do you approach those?
Paul Daugherty: I think we've got an obligation to do it very differently with this generation of technologies than the past. I'd argue, again, whether you like the terminology or not, with Web 1 and Web 2, which are the prior generations that we're operating in right now, we didn't think about responsibility upfront. We're still trying to design in the rules of how to operate responsibly with the tech. I think we have the opportunity to design responsibility in upfront from a trust perspective. How do we avoid fraud? How do we avoid identity breach and things like that in the way we create the new platforms? That sets the trust dimension.
The human dimension is how do we look out for wellness? How people are going to operate in these environments? How are we going to look after the safety of children in the environment? How do we do it with equity in mind?
The third is sustainability. There's a lot of focus on proof of work mining and the amount of emissions that it is claiming, which is the basis of a lot of the crypto and NFT market. That doesn't have to be that way. We can design it differently. That's why the Ethereum Merge is an important effort without going to proof of stake from proof of work. It's about the design choices we make on the trust, human, and sustainability dimensions to do it right the first time.
Mark Miller: There are folks out here and online business leaders who want to explore opportunities in the Metaverse with their businesses, but they don't know where to start. What's your advice?
Paul Daugherty: Well, it's early days. I think one thing all of us have to do is, you've heard this before, but we as humans are not good at projecting exponential increases in technology. You have to think about where this is going, not where it is today. It's easy to dismiss the Metaverse today. I could give you 100 reasons why you should dismiss it today. But in two years, three years, or four years from now, it'll be very different. That's what you have to project ahead to.
What I'm reminded of this is in 1999 when I was one of the leaders in our E-commerce business and companies are telling me, “No, we're good. We don't need a webpage.” In 2013, we wrote a vision that was called Every Business is a Digital Business. In 2013, most business leaders told me that was nonsense and that we were wrong. It turned out very quickly to be true.
It's easy to dismiss the Metaverse today, but I believe it will be transformative. It's a matter of looking and re-imagining where it's going to go. I tell leaders to think big. Imagine where it could go. Then, start small with something that drives value to your business today, like what we did. Then, get ready to scale fast so you can stay ahead.
I can't tell you the number of meetings I've had in the last 20 years where CEOs and boards have come to me and said, “How did I miss what Amazon did?” or “How can I be the Amazon of my industry?” Now's your chance. The rules are being rewritten. They'll be very different going forward. You can either be a little skeptical and wait for it to happen, or you can look at how you lead and shape it. I think that's the message for leaders.
Mark Miller: In your broader role as CTO, you're charged, as you just mentioned, with looking ahead. We talked about the Metaverse. What are some other predictions of trends you think we'll see in the next five years? Speaking with your bigger CTO hat.
Paul Daugherty: I'll give some predictions. Then I'll mention the book a little bit.
We'll see the emergence of a new digital giant that is approaching the Metaverse in a different way. This will create new industry leaders. I’m not saying that the current ones will go away, but we'll see the emergence of new digital dominant players in this industry.
The second prediction is that we will naturally be using the Metaverse and fibers, and we won’t think twice about it. It'll become natural in a lot of ways to us.
The third thing I'd say about the future of technology is that this is my second book. My first book was called Human + Machine, where we argued why artificial intelligence was actually good for people, not bad for people. Why it was good for jobs, not bad for jobs. That was provocative at the time, but it's turned out to be more generally accepted. Now, the argument we're making in the new book is that the more human-like technology gets, and it is getting more human-like because of all these advances, the more opportunity there is to enable the real potential in people in how we work, live, and play.
I think that's the subject of the book because I think it's incumbent on us to look at how we use technology to unlock the true potential of people. Now, I think we're entering an era where rather than subjecting people to limitations of the technology of today and rather than investing billions of dollars in change management training to force people to use technology the way it exists, we have the opportunity to use technology on human terms to really optimize human potential. That's the era we're moving into.